Tax on tax

Joseph Grech, Fleur-de-Lys.

Recently, I purchased a car for Lm6,000 (€13,980). This was prior to the change to the euro. MEPs Joseph Muscat (MLP) together with Simon Busuttil (PN) have both stated in this paper that VAT on registration is illegal according to EU law. What must I or anybody else in the same predicament do to recoup the extra four per cent paid?

These two gentlemen from either side of the political spectrum are duty bound to enlighten us weaklings as to the steps we have to take to recoup our hard earned, illegally unsurped, cash from our limited resources. It seems that vehicle owners subjected to 50 per cent registration tax (whichever the vehicle value, provided it is within this 50 per cent parameter) are being made to unfairly fork out four per cent of the value of the final price of the vehicle. The table below is meant to illustrate this.

My final appeal to the two MEPs is: help us to help you in getting re-elected!

Comments

Albert Bezzina (on 28/3/08)

Mr. Grech’s tabulation misses an important point. If Mr. Grech’s car was a new car import, the showroom or dealer’s profit mark up is not 25% but 37.5% (€2369 on €6318). When a new car is purchased the dealer does not pay registration or other fees before he gets hold of the purchaser’s money in the form of a down payment, bank draft or hire purchase agreement, the purchaser effectively pays the registration tax directly. The dealer incurs no extra expense other than the landing cost or CIF of the car.
This high profit margin on such a small car (presumably with an engine of less than 1000cc) can only be possible because of an effective monopoly enjoyed by official car dealers in Malta propagated by the current registration tax system which has been woven and modified to preserve this effective monopoly to the detriment of the Maltese consumer our right to enjoy the free market policies of the EU.
As regards the extra VAT on the registration tax, this is illegal and Malta has but a few more weeks to rectify the situation. As regards claiming back VAT paid on registration tax from vehicles registered after first of May 2004, it will either be paid back bona grazia by the Government (unlikely) or else following an action in the Maltese courts after the European Commission forces Malta to change the regulations. I claim Lm800 on my 2005 purchase.