Meeting retailers' and consumers' needs
It really surprises me that some of the people who write in the media sound as though they are living in another age. At EU level, and increasingly so at the Maltese level, GRTU as a member of EuroCommerce (the European federation of traders,...
It really surprises me that some of the people who write in the media sound as though they are living in another age. At EU level, and increasingly so at the Maltese level, GRTU as a member of EuroCommerce (the European federation of traders, wholesalers and retailers) conducts a policy that what is good for a customer is good for retailers.
EuroCommerce holds regular structured meetings with BEUC, the European consumer organisation. In Malta this does not happen simply because the consumer's national representation is not so effective. However, meetings with Consumer and Competition Division are regularly held. In addition, GRTU has a regular team taking part in all discussions and workshops on how to improve customer relations and strengthen the economic power of consumers.
A retailer or trader does not exist for his own sake but because there is a consumer willing to buy his services. The GRTU bases all its solutions, in all discussions with government, on this basic concept.
The Pharmacy of Your Choice (POYC) scheme is a typical example of how GRTU operates. Pharmacies in the community, represented by GRTU, are hardly making any additional profit from the operation of POYC, indeed they have gone through heavy expenses to be able to offer the services and standards expected under the POYC regime and they are hardly receiving any additional economic gain.
The point of this issue is that consumers were suffering unnecessarily to obtain their medicine entitlement from the few disposing government outlets. Pharmacies in the community have now opened their doors to patients offering more comfort and a more professional service. It's a win-win situation. Most pharmacies are utilising better their excess capacities while patients and consumers are enjoying the benefits with a system that is more efficient both in terms of the total outlay of government in the financing of medicine supplies but also in the management of the whole scheme.
GRTU can mention numerous examples of how its proposals aim to provide a better service to consumers. At the end of the day, of course, retailers, traders or service providers will benefit from increased efficiency, reduced administrative burdens and other induced costs and benefit economically. But it is negativism at its best when people write in the media insinuating that all that GRTU and its members are interested in is increased profits - and by profits what many of these snipers really mean is profiteering.
We all buy services and know that overall the standards and quality of retailing and service provision in Malta are improving on a daily basis. The illicit trader, scoundrel and profiteer still exist. However, sweeping statements criticising the retail community in general hurt badly considering the millions of euros that Maltese traders, retailers and service providers must spend to compete with the demands of increasingly well-informed consumers.
On the issue of taxation on vehicles mentioned by Albert M. Bezzina, in the Times (April 22) entitled "Car-tax war heating up", GRTU is also trying to achieve an objective which satisfies the needs of retailers, traders, consumers and, yes, government finance too. We all pay taxes after all and if government lands itself in another deficit quagmire, all of us will have to pay additional taxes, so it is not just a question of amount but also of ensuring that a tax is not removed from one side and loaded onto another. GRTU represents more than 7,000 members and all the outlets, families and employees that represents. These come from different segments and sectors but they are all consumers and car owners. The GRTU does not only take an interest in the sector which is facing the "issue of the day" but also of the effect on other businesses and consumers in general.
It would be a fallacy for any serious organisation like GRTU to think egoistically and disregard the interests of the whole community. We would have learned nothing in these 60 years of existence, were we to think any differently.
The major point for all of us on the car registration issue is that we must not abruptly devalue an asset that for many households is still very important. If registration taxes were to be cut abruptly, the value of each car on the street will be halved. Auto dealers who together have millions of euros invested in cars stocks will lose millions and GRTU will be forced to claim compensation from government on the same lines as it did when VAT was originally introduced and overnight traders and retailers were expected to lose millions of liri on the duties and taxes suffered on the stocks held. No one in his true mind wants a repeat of this drama.
GRTU is therefore proposing that the first thing to do is remove the tax that - as the GRTU has been saying for 10 years - is unfair and illicit in terms of EU Directives. This is the minimum tax imposed on the importation of used vehicles. This tax is independent of the hefty 50.5-75 per cent registration tax regime and imposed so that older cars or smaller cars imported at low value will also pay a high tax. This minimum tax must be removed immediately and the agreed taxation percentage should be imposed according to the value of the invoice. Government - indeed all of us - do not want Malta to become a dumping ground for old cars; this is the fear of those who object to the removal of the minimum tax. GRTU also wants a reform of the annual road tax system so that annual fees will be in line with EU Directives and lead to overall reduced air pollution. GRTU insists that government should immediately decide on a cut-off date from which the new tax regime will be applied. This should apply first and foremost to the most obnoxious bit of taxation: the value added tax (VAT) imposed on the value of the car imported and on the registration tax.
This is tax on a tax and GRTU has been insisting since the day VAT was introduced that this imposition is in breach of the EU Directives on VAT. It should apply also for the minimum tax regime, for any changes in registration tax values and to changes in road licence fees.
The issue is indeed more complex than many think and GRTU is willing to help government to find a solution that will benefit the consumer who is on the market to buy a new car, a quality imported used car, any other car from a dealer, and the consumer who though not yet on the market is not willing to suffer a devaluation of a trade-in price of the car in possession.
GRTU seeks a solution that will provide benefits to traders and retailers of vehicles that gives a better choice to consumers, that will not instigate government to load us with some other new tax to substitute whatever they lose on revenue from the road vehicle tax reform, and that will cause Malta to abide faithfully with the EU environmental protection regimes. It is not easy but it can be done. A solution will be found if none of us sell solutions with blinkers on.
• Mr Farrugia is the director general of the GRTU.
EuroCommerce holds regular structured meetings with BEUC, the European consumer organisation. In Malta this does not happen simply because the consumer's national representation is not so effective. However, meetings with Consumer and Competition Division are regularly held. In addition, GRTU has a regular team taking part in all discussions and workshops on how to improve customer relations and strengthen the economic power of consumers.
A retailer or trader does not exist for his own sake but because there is a consumer willing to buy his services. The GRTU bases all its solutions, in all discussions with government, on this basic concept.
The Pharmacy of Your Choice (POYC) scheme is a typical example of how GRTU operates. Pharmacies in the community, represented by GRTU, are hardly making any additional profit from the operation of POYC, indeed they have gone through heavy expenses to be able to offer the services and standards expected under the POYC regime and they are hardly receiving any additional economic gain.
The point of this issue is that consumers were suffering unnecessarily to obtain their medicine entitlement from the few disposing government outlets. Pharmacies in the community have now opened their doors to patients offering more comfort and a more professional service. It's a win-win situation. Most pharmacies are utilising better their excess capacities while patients and consumers are enjoying the benefits with a system that is more efficient both in terms of the total outlay of government in the financing of medicine supplies but also in the management of the whole scheme.
GRTU can mention numerous examples of how its proposals aim to provide a better service to consumers. At the end of the day, of course, retailers, traders or service providers will benefit from increased efficiency, reduced administrative burdens and other induced costs and benefit economically. But it is negativism at its best when people write in the media insinuating that all that GRTU and its members are interested in is increased profits - and by profits what many of these snipers really mean is profiteering.
We all buy services and know that overall the standards and quality of retailing and service provision in Malta are improving on a daily basis. The illicit trader, scoundrel and profiteer still exist. However, sweeping statements criticising the retail community in general hurt badly considering the millions of euros that Maltese traders, retailers and service providers must spend to compete with the demands of increasingly well-informed consumers.
On the issue of taxation on vehicles mentioned by Albert M. Bezzina, in the Times (April 22) entitled "Car-tax war heating up", GRTU is also trying to achieve an objective which satisfies the needs of retailers, traders, consumers and, yes, government finance too. We all pay taxes after all and if government lands itself in another deficit quagmire, all of us will have to pay additional taxes, so it is not just a question of amount but also of ensuring that a tax is not removed from one side and loaded onto another. GRTU represents more than 7,000 members and all the outlets, families and employees that represents. These come from different segments and sectors but they are all consumers and car owners. The GRTU does not only take an interest in the sector which is facing the "issue of the day" but also of the effect on other businesses and consumers in general.
It would be a fallacy for any serious organisation like GRTU to think egoistically and disregard the interests of the whole community. We would have learned nothing in these 60 years of existence, were we to think any differently.
The major point for all of us on the car registration issue is that we must not abruptly devalue an asset that for many households is still very important. If registration taxes were to be cut abruptly, the value of each car on the street will be halved. Auto dealers who together have millions of euros invested in cars stocks will lose millions and GRTU will be forced to claim compensation from government on the same lines as it did when VAT was originally introduced and overnight traders and retailers were expected to lose millions of liri on the duties and taxes suffered on the stocks held. No one in his true mind wants a repeat of this drama.
GRTU is therefore proposing that the first thing to do is remove the tax that - as the GRTU has been saying for 10 years - is unfair and illicit in terms of EU Directives. This is the minimum tax imposed on the importation of used vehicles. This tax is independent of the hefty 50.5-75 per cent registration tax regime and imposed so that older cars or smaller cars imported at low value will also pay a high tax. This minimum tax must be removed immediately and the agreed taxation percentage should be imposed according to the value of the invoice. Government - indeed all of us - do not want Malta to become a dumping ground for old cars; this is the fear of those who object to the removal of the minimum tax. GRTU also wants a reform of the annual road tax system so that annual fees will be in line with EU Directives and lead to overall reduced air pollution. GRTU insists that government should immediately decide on a cut-off date from which the new tax regime will be applied. This should apply first and foremost to the most obnoxious bit of taxation: the value added tax (VAT) imposed on the value of the car imported and on the registration tax.
This is tax on a tax and GRTU has been insisting since the day VAT was introduced that this imposition is in breach of the EU Directives on VAT. It should apply also for the minimum tax regime, for any changes in registration tax values and to changes in road licence fees.
The issue is indeed more complex than many think and GRTU is willing to help government to find a solution that will benefit the consumer who is on the market to buy a new car, a quality imported used car, any other car from a dealer, and the consumer who though not yet on the market is not willing to suffer a devaluation of a trade-in price of the car in possession.
GRTU seeks a solution that will provide benefits to traders and retailers of vehicles that gives a better choice to consumers, that will not instigate government to load us with some other new tax to substitute whatever they lose on revenue from the road vehicle tax reform, and that will cause Malta to abide faithfully with the EU environmental protection regimes. It is not easy but it can be done. A solution will be found if none of us sell solutions with blinkers on.
• Mr Farrugia is the director general of the GRTU.