Departure tax to be lifted in November

The controversial departure tax levied on every passenger starting his trip from Malta will be completely abolished as from November, The Sunday Times has learnt.

The government has informed the European Commission in writing about its intentions to remove the tax, which ploughs some €3 million into the government's coffers.

"I can confirm that we have taken the decision to remove the departure tax at a time when airlines start their new schedule," Finance Minister Tonio Fenech said, when contacted.

The Nationalist Party had pledged to remove the remaining €23.30 (Lm10) in departure tax in its electoral programme. The tax had already been halved in the Budget presented in 2006.

The issue will be raised once again in Brussels on Wednesday when the College of EU Commissioners will decide whether to take Malta to the European Court of Justice (ECJ) as part of its ongoing infringement procedures. However, Commission sources explained that the EU executive is expected to freeze its decision following the government's commitment to remove this tax.

"Although Malta had promised the Commission to amend the tax and bring it in line with EU laws by last March, we understand that elections were held and the plan was disrupted due to the suspension of parliament.

"However we still think that this correction should be made as soon as possible," the Commission sources said.

Asked why the government has not chosen the option of just amending the tax by spreading it to all passengers including those starting their trip from abroad, something permitted by EU laws, Mr Fenech said that although this option was being mooted, the government decided to fully respect its electoral promise.

"In our electoral programme we pledged to remove, and not amend the departure tax. We keep our promises," he said.

Last December, the Commission was due to refer the issue to the ECJ following two written warnings issued against Malta over the non-conformity of this tax with EU laws over the past year and a half.

However the decision was postponed following discussions between EU officials and the Maltese government. The first letter of formal warning by the EU executive was issued to Malta in July 2006, followed by a reasoned opinion the following December.

According to the Commission, the airport tax is discriminatory as it is only levied on air passengers starting an international journey from Malta. The Commission argued that the current tax structure puts an unfair burden on residents in Malta, and makes it more difficult for them to receive and provide services in other member states.

The issue was first raised by MEP Simon Busuttil who asked the Commission to investigate the conformity of this tax with EU rules.