Friday, 8th August 2008 - 09:30CET
New car importers voice objections to proposed tax system
New car importers today called for an urgent meeting with the government to finalise the new vehicle tax system and for a formal announcement of the new system to be made immediately.
William Shaw, Secretary of ACIM (Association of Car Importers Malta), said:
“The government is feeling comfortable with progress on the new vehicle tax regime because the figures for the first six months of the year, which reflect cars delivered, are more or less the same as last year’s. But this year new car importers have received far fewer orders than last year.
“This has already started showing in the figures for June and July, and will be felt more and more in the remaining months of 2008.”
Mr Shaw stressed that ACIM is not insisting that the new system be introduced immediately if the government is not in a position to implement it. “At least we will know what the new system is, we will be in a position to order vehicles according to the new norms to be introduced in the coming months and the Maltese will know the price they have to pay for these vehicles.”
He explained that there had been great expectation for the reform in the registration tax system since Malta joined the EU and prices had become more transparent since the adoption of the euro. The Maltese could see prices shown in TV commercials in Italy and compare them with local prices.
Commenting on the proposed new system, Mr Shaw said ACIM does not agree with the congestion element since Malta, as far as was known, would be unique in adopting this type of tax on car sales. Congestion charges are applied in cities, and there is already one in operation in Malta – in Valletta.
“ACIM understands that, under the new tax system, small cars will go down in price. In our opinion, this decrease is not enough because medium sized cars will cost the same and large cars are going to go up,” Mr Shaw said. “This measure will negatively affect Maltese families with children because they need a medium-sized car and these are the cars that are taxed the most.
“Under the new tax system new cars are not going to be significantly cheaper.”
He said the ACIM also objects about the delay in the publication and introduction of the new tax system, a lack of consultation on the details of how the new congestion element of the tax is going to work and the collection of VAT on the registration tax – a tax on a tax – which Government continues to collect in breach of EU directives.
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In some countries a timer is displayed under traffic lights which indicate the time to the next green. If it is more than 1minute, it is mandatory to turn off your engine. At night, with no conflicting traffic, red lights turn green on an approaching car so as to prevent unnecessary stopping. Our politicians should look a bit around them when they are touring other countries at our expense!
Car importers are trying to give the impression that they care about us as a whole by making statements that families will most be effected as medium sized cars will be the same in price. The average family today is small and a small car is adequet. No one will drive for hours and hours to get to a place and if people had more small cars there would be more space to park them. Importers have a larger profit on larger cars.
The congestion charge I personally believe and feel it is a way for the government to keep the income it gets from the system of registration that there is now. The government does not care about the environment - only sponging.
The craters in the roads do not just cause damage to vehicles but could cause you to loose control of it and cause internal injury due to the organs shaking.
sorry but that is twisted reasoning. When you weigh the average income of us Maltese compared to that fo the UK the price of new cars is an unjustifiable and complete rip off. No twisting and bending of facts and figures will change that. What makes the situation the all more pathetic is the disastrous state of our roads in general.
My proposal is something short of taxing euro for gram of CO2/pax and give incentives to people who actually take care of their car and is still within EU levels. Using car pooling lanes and taxes like CVA are also ideas to curb the use of cars. Single lane roads, non computerised traffic lights, ridiculous speed limits forcing drivers to drive in 3rd gear, pathetic public transport, no monorail/underground systems are the reasons I state that the goverment is mostly responsible for the sorry state of our poor air quality and low quality cars.
biss kif u meta qiesu hadd ma jaf!
Why do you say Govt is procrastinating?
Two months ago Government promised a new system. When Government rushes through certain reforms, it is RIGHTLY criticised for not consulting. Fair enough.
but now that Government has taken time to meet with the different stakeholders....it is procrastinating?
Why do you mention the need (or someone else) of a White Paper? Did you read the full proposal in the pre-budget document?
Why do some people speak befoer looking at the whole picture.
Government started operating in March. If we have a new and effective system in place by budget, that's around 6 months, I think that's fair enough.
you say
Malta has to follow suit on countries such as the UK which do not pay any tax when buying a new car and replace their car every 3 years. We are EU citizens AND WE WANT SUCH BENEFITS!!!
again..same line of thought here. Since when EU rights mean you get the same service as in another country?
You mention the UK. Their cars are cheaper. But as I wrote in the previous post. Fuel, insurance, services are much more expensive.
And it's not just for cars. Think energy. Do you ever think why so many British tourists come to Malta (Especially elderly) in Winter and live whole weeks/months in hotel? Yes, they find that living a month in a hotel here is actually cheaper than staying at home and paying the electricity bills. So, should they, as EU citizens demand exactly the same electricity bill (cheaper) as in Malta?
What if Government decides to change the side of the road we drive on, to be like, say, the Italians? Isnt that an "EU" right?
What if Government allows councils (like in most EU countries) to impose taxes, justifying itself that it is an EU right?
You say
Why should cars in Malta be more expensive when compard to other EU countries? After being in the EU since 2004 it is well overdue that the Maltese should have the same rights and obligations as all the other EU citizens.
Sorry but this is stupid (would have preferred avoiding this word but couldnt think of any).
Since when being in the EU, and having the same RIGHTS ..mean same PRICES?
Ok- you want to pay the same price for cars like the rest of the EU.
But then what do you say about the fact that
a) insurances cost around 30% (EU average) than in Malta?
b) fuel costs around 30% more than in Malta?
c) that Car services companies would charge you more than two times the amount you'd pay in Malta?
Come on...
I would love cheaper cards mind you.
I'm not doign any political arguments here. It's just that it doesnt make sense to say "we joined the EU..then same prices"
By increasing the tax on petrol and diesel, the government will be taxing the use of vehicles and could afford to reduce or remove registration taxes. With oil prices starting to fall the tax increase could be mostly absorbed within the current fuel prices.
Commercial, essential and public transport vehicles could have their annual Road Fund Licence reduced to compensate for the increased running costs.
It will therefore cost you more to run a car with high CO2 emissions engine, than one with a green lean engine. So larger cars will still be taxed more than smaller cars.
People who currently have no alternative than running an old banger with high CO2 emissions may be persuaded to upgrade to a more fuel efficient car, once newer cars become more affordable to buy and less expensive to run.
This tax will discourage the use of cars, and encourage car sharing, more use of public transport , not to mention cyling and walking, conducive to less congested roads and a healtier nation.
Malta has to follow suit on countries such as the UK which do not pay any tax when buying a new car and replace their car every 3 years. We are EU citizens AND WE WANT SUCH BENEFITS!!!
Why should cars in Malta be more expensive when compard to other EU countries? After being in the EU since 2004 it is well overdue that the Maltese should have the same rights and obligations as all the other EU citizens.
I think that Hybrid cars should be incentivised and omitted from paying taxes. Cars of the sort include the Toyota Prius which are very environmental friendly.
I hope that all these comments are taken seriously and action will be taken as soon as possible.
mannes
The Opposition spoke about the issue of the car registration tax twice in the last few days. In an article entitled 'Uncertainty over registration tax messing up car business' on the 31st of July, Gavin Gulia and Joe Mizzi highlighted the notion that "the fact that the government was dragging its feet over the removal of the registration tax was bringing about uncertainty" among sellers and buyers alike.
Furthermore, on the 4th of August, Labour Party spokesman Dr. Gavin Gulia further tackled this issue in an article entitled 'Labour highlights uncertainty in car market'.
The articles are still available on this website if you spare a minute to use the 'Quick search' facility on this site and find them before you start firing your brimmed canons.
On the other hand our current tax regime is a complete joke, the European dream we opted for as a country was mainly in order to rectify these irregularities and not to be lumped with the same taxes camouflaged in a different aformat. We expect our cars to be at the same rates as our European peers.
The government doesn't!! If they did, they would have subsidised cars with less than 120g/km emissions.
RE another topic: The promised income tax revisions.. the pre-election promise for re-revision of income tax in budget 2009 was lately uncertain since oil reached over $140 barrel, understandable. But guess what, surprise!! Today oil dipped below $118, and it's going down.
1.) When is petrol going to decrease at the pump?
2.) Since oil went down, there's no reason why the income tax revision should be cancelled... am i right!?!?
Let them have it all. With the revenue we can start filling the 'Hofra' (which everyone seems to have forgotten). After all ' B' tal-linja jaqbillek ' and there is still plenty of time for the next election.
GM kindly get it in your thick head, people NEED cars, so if it's a brand new efficient car or a second hand dumped car or an old banger barely making VRT illegally once a year, people will use the car. Why? Because you, dear Goverment are going to SUBSIDISE criminal bus drivers/owners to do what is normal in other industries, competition. Our public transport is, to say the least ,pathetic, as is traffic control which seems to be taken out of a 1940s book of traffic managment. NONE.
Flimkien Kollox Possibli!! :)
The opposition called this an unjust tax and also argued that people should be free to do what they want with their money.
25 years later, and this unjust tax is still in existense, even on second hand cars that are imorted from the EU and are already registered in the EU.
According to Tonio Fenech this will be sorted out in he next budget (bagit), and Pigs Might Fly,
what is happening now is that we are putting the blame on the invironment, so as you will see, it will be a matter of `Taking it from Paul to give to Peter` and in all probabilities we will end up paying more, just wait and see.
Let's be honest, t's obvious that a reduction in taxes on new cars should benefit the car importers - but at the end of the day, what benefits them is automatically going to benefit Joe public who would finally have access to more affordable, cleaner and safer new cars.
Anyway, the fact remains huge expenditure, so they make most of their money from the revenue. In my opinion the government should find some otherway to have their revenue meet their expenditure. Buget more and waste less rediculous amounts of money. Read MaltaToday and you'll be impressed at how much money the government wastes.
I believe these are difficult times for a lot of countries, not just ours. While we do have high taxes on many things, we are surviving a very difficult era. Unfortunately where else can the government make it's revenue if not from it's own people. We have no other resource...
Luckily the country still is surviving, we don't suffer what even the most powerful countries suffer, but we need a source of income.
The reduction in prices of new motor vehicles shall do nothing but further add on to the 291,000 motor vehicles we have already in Malta. Car registration - even though a questionable tax by many standards and despite the fact that it is outrageously high - has proven to have today become an ineffective deterrent to control the influx of new vehicles in Malta.
The truth is that the authorities need to cap the number of motor vehicles in our unlivable towns, drastically improve public transport and promote the scrapping of any inefficient vehicles which litter our streets.
The same decisive forms of controls are necessary on other sectors because we cannot have the absurd situation we have today where laissez-faire rules the day.
Nobody is understanding your point. It has nothing to do with car registration. Please explain.
Likewise, the same arguments apply for so many other sectors - and not just the transport workers who went on strike some weeks ago. Suffice to say, one needs only compare certain prices we pay for essential commodities (like pharmaceuticals) to start wondering whether we are being taken for the proverbial ride.
And I won't go into the merits of other key industries such as, for example, financial services where the profits registered speak for themselves.
No wonder we are so vociferously sold the mantra that governments should adopt a laissez-faire attitude towards business! Mind you, most businesses - especially the SMEs - are as much victims to these practices as the ordinary man in the street who is so blissfully immersed in waving blue, red or whatever coloured flag is thrust into his hands.
The people want cheaper cars, but if there is to be little change in the price why change the tax system. What do we care what the system is called or how it works. The end result is always the same, we are the 2nd most taxed country and our wages are a joke. I expect GonziPN to bring our wages upto date with the rest of europe, then he can introduce this NEW system.
The government needs a certain amount of revenue in order to cover the current expenditure.
If it is not from the car imports registration fees, vat, road tax, fuel tax, etc... then, the government has to find alternative sources of revenue.
It is only a question of balancing the books, that's all !!!
It's logical.
Cheers.
If any blogger below this thinks that he will get any tax reduction on anything, especially car registration, forget it.
The coffers are below sea level. What each and every one of us was made to believe is all fiction.
Regarding second hand cars imported from the EU, I cannot understand why to import a car from eg. Luxembourg to Germany you have to pay 30€ for the no. plate and tax, and to import to Malta you have to pay thousands of €. This is pure discrimination in the face of the Maltese consumer.
This is a severely flawed system as consumption of petrol is based on usage not the cost of the car.
As such the only FAIR solution would be to abolish the current road tax system and introduce a tax on petrol. The more you use the more you pay. The less you use, the less you pay. Basically you pay for your consumption.
This way, the government can do away with the whole department responsible for Road Tax, save all the time and money spent on Insurance companies issuing the disk, one less task the traffic warden has to do and ensure that everyone does actually pay it.
It is such a simple, easy and obviously the most effective solution that I am sure no one would even consider it.
Obviously enough, we can see that there is a huge difference in price when comparing new car prices in Malta with those in Italy and the rest of EU. We are not as dumb as the govt thinks we are.
People who are in the motorsport scene will have a negative effect as well. Why should I Buy a fast car that costs €40,000, having to pay a further 65% on top of that and another 18% on the gross value? (which the final value comes up to €77880) This is a complete ripoff.
WE NEED A GOOD SYSTEM THAT IS OF AID TO THE MALTESE AND NOT OF A DETERRANT
If prices are cheaper, at least the roads would have better looking, safer and more environmentally friendly vehicles.
We are EU members right? Right. I can go anywhere in the EU and buy anything and just bring it to Malta right? Right.
What is the difference with a car? Why cant I just go to Italy or UK get a car, pay E50 for a licence plate and get it - period? What is all the hassle about?
I personally am one of those who has actually put off buying a car - I was supposed to get one over 3 months ago, i am going to wait to see.
Well stated, I just cant agree more, but do you really think that this Administaion give a toss about the Maltese families?
I an a Citizen I need a clear explanation as I got to vehicles from the Shaw's may be I get a rebait.
Toni
Good point about the families but for sure it will fall on deaf ears. Mr Gonzi said to us many times that by 2010 the Government will break even so lets see if the price of cars will go down or not..
I bet it will not as all they care is how to make money out of us and its in their interest to keep Maltese people SUB STANDARD. Malta nothing more then a 3rd world country. I voted yes to EU so that I will have equal opportunities like other people in EU however the government treat us like slaves! TAX TAX & MORE TAX.
This statement is a fact - families need a medium-sized car at least. Child and booster seats occupy lots of space and do not fit properly in small cars without compromising the safety of the children themselves. Furthermore children come with a lot of kit: pushchairs, bags, toys, etc all of which requires a decent sized boot.
I hope that the Government considers the needs of families when drafting the new measures.