Uncertainty over registration tax messing up car business

Uncertainty over the new car registration tax is messing up the car business by affecting sales negatively, according to Gavin Gulia and Joe Mizzi, Labour spokesmen for the economy and the self-employed and transport and resources respectively.

The fact that the government was dragging its feet over the removal of the registration tax was bringing about uncertainty, they said.

The government has been postponing the removal of the tax for months, extending the waiting time. This was, doubtlessly, responsible for the stagnation of the market.

Since it is thought that the tax removal would bring about a slide in the purchase price, the demand for vehicles has gone down drastically, they pointed out.

Many businesses have invested in buying cars but they remain stuck with their stock and are facing major financial problems. Related businesses such as mechanics are complaining about lack of work and loss of profits.

In a reaction, Finance Minister Tonio Fenech urged the MLP to analyse and give its reactions to government proposals and policies rather than coming up with baseless statements.

The spokesmen had clearly not bothered to look at the Pre-Budget Document 2009, which includes the framework of the new car registration system, he said.

The car registration reform could not be carried out overnight because part of the implementation included legal amendments.

The government wanted to put everyone's minds at rest that, while it wants to conclude the process in the fastest time possible, fiscal changes had to be carried out in a studied manner. On the other hand, because it understands the uncertainty that could exist on the market, it has given a guarantee that whoever buys a car under the current taxation system would be credit paid once the new system is introduced.