A tax and two discs

Finally, we have been told that the government intends changing the current vehicle registration tax regime and introducing an emissions contribution instead. Only not yet. One will have to wait until after the next election to know the workings, rates and tax credits associated with this shift. Moreover, we are told that the new system will take about three years to phase in.

Thus, while this is welcome news, it smacks too much of electioneering. For the past three years, the government has not only been resisting this change but has put forward all the possible arguments ridiculing the idea of an emissions contribution. It stated that such an alternative system, promoted by the European Commission, could not be implemented in Malta where consumers fork out between 50 per cent and 75 per cent of the vehicle value in registration tax.

The change of heart comes just after the latest Ecofin Council discussing the issue and too close to the election for one not to question the timing.

Whatever the case, the bottom line is that the news is welcome but that the past three years could have been used to introduce the new system rather than resist it. Furthermore, one needs to see the workings of the proposed system before stating whether the change will be cosmetic or whether it will be for real.

I will continue to campaign for this change even after the next general election.

In the meantime, there is a more pressing issue which I have already raised and about which the government has been served with a warning by the European Commission, namely the practice of charging VAT over and above the vehicle registration tax.

This leads to the consumer being made to pay an additional 18 per cent over the already hefty registration tax. Such a procedure runs against EU rules as clearly spelt out by the European Court of Justice in the De Danske Bilimportorer case (C-98/05).

I submit that the government not only needs to do away with this "tax on tax" but all those who have bought a vehicle since May 1, 2004 are entitled to a refund on the VAT element.

A responsible government would have started making provisions for these refunds to be paid out. There has been no such provision in next year's budget even though the government has already admitted it needs to make changes related to the way VAT is charged.

Even though we are told that public finances are in excellent shape, I have no doubt that it will be difficult for any government to fork out the refunds in one go. It is for this reason that a sum should be put aside. Ideally, refunds should start being paid immediately. There is no need to wait for a rehaul of the system to do that.

Last week it was announced that Go, formerly Multiplus, have secured the broadcasting rights for the FA Cup and the English national team matches for their forthcoming friendlies and World Cup qualifiers.

This means we are once again in the situation where those football enthusiasts wanting to follow the Premier League and the FA Cup need to buy two decoders and subscribe to both Go and Melita. Is it possible there is not a way where subscribers can at least do with one decoder and simply switch cards?

In the technological era where we learnt that the data of 25 million British citizens can be stored in just two discs, the Malta Communications Authority keeps telling us that such interoperability is not technically feasible!

Even if one were to accept this version of facts, it does not justify not looking for other solutions.

One alternative would see the regulator require the two digital television service providers to supply one another, at a premium, with at least part of the events for which they acquire the rights.

Regulators are there to regulate and to stop this farce.

Dr Muscat is a Labour member of the European Parliament and vice president of the Economic and Monetary Affairs Committee.

www.josephmuscat.com