Matthew Xuereb
No payment, no taxes, medicine importers tell government
It is invoices yet to be settled by the government and not cheques that medicine importers are attaching to their VAT returns.
Reginald Fava, who represents the importers at the Chamber of Commerce and Enterprise, said some have also attached a note explaining they are unable to settle the tax bill because they were cash-starved by the government's late payment for the medicine it buys from them.
The importers hope the 12 per cent penalty for late payment of VAT will be waived.
The action was taken on the personal initiative of the importers and Mr Fava could not say how many of them were involved.
The move comes after leaders of pharmaceutical importers warned last week that they may have to stop getting essential medicines if the government failed to pay them for the goods they have already supplied.
The importers, who say they are owed a €25 - €30 million, warned that if the situation persists they were considering lay-offs or even winding up their companies.
Alternattiva Demokratika chairman Arnold Cassola had suggested that the government should offset its dues with VAT and other taxes owed by the importers to alleviate the crunch. The importers appear to have taken to the proposal particularly well.
When asked what it plans to do, the Finance Ministry said the government will be honouring its commitment to pay the importers. Asked when, a spokesman said there was no timeline.
Social Policy Minister John Dalli was a little more forthcoming, saying that the funds allocated for the purchase of medicine had run out but will be replenished in January.
He said the government is looking into solutions to this problem by pursuing a reform in the way medicines are bought, adding that he would soon meet the Director of Contracts to find a way forward.
Mr Dalli said he was worried about the matter, adding: "We will not leave people without medicines".
Still, Mr Fava said there had been no feedback from the government since the matter was made public last week. "Not even a sound".
The issue over medicine payments is not new and has been something of a chronic problem over the past few years. Back in 2005, the Chamber was forced to accept an agreement with the government under which money owed to its members would be paid within 150 days, gradually to be reduced to 90 days. In return, they were made to waive interest on such late payment and the government waived penalties for late consignments.
Mr Fava said that, while the importers had kept their end of the bargain, the government had still charged them for late penalties throughout the years and was not even respecting the 150-day deadline.
He said that in a recent meeting the director of health had offered to implement the 2005 agreement in January 2009 but the Chamber refused.
"It is unacceptable. The importers' main client is the government. We cannot stop importation because we feel we have a moral obligation towards the client. But if our members cannot afford to pay the international supplier in advance, the supplier will simply not ship the order," Mr Fava noted.
Suppliers give pharmaceutical importers a maximum of 60 to 90 days to settle their accounts but, given the prevailing financial crisis, some were insisting on cash in advance, even before the goods were shipped to Malta.
Last week, the importers had mentioned the possibility of taking the matter up with EU institutions once the government was acting in breach of the EU payments directive. Asked how close they are to doing so, Mr Fava said they were as close as the government was close to paying them for the medicines they delivered.
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M Borg
Dec 20th 2008, 06:24
Again, the same story! Who is accountable for all this? Economics states that all resources are limited and we shall do the best with the available resources! The persons running the Health Department seem not to know anything about Economics! It seems that they do not know that in the real world resources are limited. Sweeping statements are not enough. We have to analyze the situation. We need Economists to work together with Accountants, Mr Dalli. Priorities have to be set. Clamping down on illegalites is a MUST. But it smells from the high levels of this Dept. Its true that there are abuses by the receiving end, (in a real world one can never eliminate abuses) BUT its also true that there is EXTREME MISMANAGMENT within the Health Department. How come that the Auditor General have never filed a report on this Department, like the one on Dr. Gatt's Ministry? Mafia and Cosa Nostra are not only a problem of our Sicilian/Italian neighbours! Whoever is responsible shall be accountable but apparently there are some untouchables in this Department. Mr Dalli a RADICAL CHANGE is needed, and you need to start from the TOP !!!!!
michael fenech
Dec 19th 2008, 20:04
@Carl Farrugia,
Mr. Farrugia, I'm sorry to hear about your condition, I sincerely hope you get better soon.
If you think Mr.Farrugia that 50c was a lot to pay I hate to see what you will say when this arrogant GonziPN government come up with a fee of its own. Again few years back we had a Prime Minister who was going to rise the W/E tariffs( to save Enamalta) and all hell broke out, look what kind of tariffs this arrogant GonziPN government came up with.
carl farrugia
Dec 19th 2008, 18:32
@ Michael Farrugia
We are not getting medicine or anything else for free. we are paying for them through our taxes. Do you mean to tell me that if Gonzipn as you call the government were to introduce a 50c fee you would not protest? I would, just like I did when Alfred Sant proposed the move. 50c may not be much to you but to someone like me who needs six different medicines to keep me alive (and I'm not exagerating) that would ammount to quite a substantial sum monthly.
lgalea
Dec 19th 2008, 18:04
Gonzipn = no money for medicines
Gonzipn = €290, Lm125 per week salary increase for Prime Minister, Ministers Parliamentary Secretaries.
Miserly €4 for the rest of the population who are children of a lesser God from Gonzipn Scrooges and Grinches.
michael fenech
Dec 19th 2008, 16:16
@ Carl Farrugia
This GonziPN government is going and it will introduce some kind of fee,( my feeling is that it will be more than 50c) as Minister Dalli said ,the government have NO FUNDS for MEDICINE.
If that 50c fee was implemented than the system wouldn't be in the mass that it is to-day.
I'm not saying these things myself,this is the Minister in charge that said not too long ago that we can not expect to keep getting medicine for free,Let's face it Mr.Farrugia what's 50c ?????
carl farrugia
Dec 19th 2008, 14:53
@ michael fenech
The 50c fee was going to be introduced to cut abuses and not for the reason in question.
if that 50c were introduced the victims would have been the honest citizens as the ones abusing the system would have stopped receiving 'free' medicines (because they can go without) that would have left the genuine medicine users to foot the bill. That is why the fee was unjust. if there are abuses (and here are) the culprits should be caught and stopped. if this fee is introduced by this governmnet it would be making the same mistake and deserves the same criticism.
michael fenech
Dec 19th 2008, 13:56
Correct me if I'm wrong,a few years back Malta had a Prime Minister that could see past his nose,this PM wanted to introduce a 50c fee on all free drugs, because he could see the problems ( unlike GonziPN) that Malta was heading for . The PN and all there apologists called this man every name under the sun.
How can GonziPN spear 80 million euros for CityGate project when at the same time Minister Dalli is telling us that the funds allocated for the purchase of medicine had run out.
PRIORITIES PLEASE.
Paul Barrett
Dec 19th 2008, 12:04
As far as the collection of tax is concerned, I would have thought that a simple mathematical equation of writing off the tax against money owed would ease the immediate problem.
david Calleja
Dec 19th 2008, 10:05
This comes as no surprise...The Government has been running on empty for some time now and amidst all this crisis, it allocates hefty salary increases for it's ministers and MP's.
The crisis which has been brought about by years of inefficencies are shouldered onto the taxpayer and consumer and while we spend millions in social benefits to unmarried mothers and single parents encouring rampant abuse, th government can not pay it's creditors. This is the way forward. Sometimes I seriously wonder if the PN was prepared for this legislation when the pre-election budget was so frivilous. The feel good factor we enjoyed during last election has definitley expired and are now facing a crisis which is purely Government induced through mismanagement of public funds, early retirement schems for the dock workers which were beyond out budget, inefficencies, theft,a labour intensive civil service and a nation riddled with taxes to sustain all of this.
This is the acountability we were promised.
D.MANGION
Dec 19th 2008, 10:01
....and during this year's budget speech, we (common average idiots) were led to believe that the government would be supplying the expesive drug Herceptin for free!
But now, we common average idiots have been informed, that GonziPN's promises have an expiry date.