Lack of information stalls sales of second-hand cars
Second-hand car importers are still unable to say how much their cars will cost under the new tax regime because they are still waiting for certain information from the government.
They are urging the government to publish the "residual values" of second-hand imported vehicles, which is the value of a car established by the government for registration purposes.
The Used Vehicles Importers' Association yesterday called on the authorities to publish these values as soon as possible to allow importers to work out the selling price of their cars.
Although the association is expecting a "substantial drop" in the prices of second-hand cars once the new registration tax comes into force, the 28 importers are unable to answer their clients' questions, association president Oliver Brownrigg charged.
"We cannot tell clients the price of cars under the new regime and this is costing us business," he said.
Mr Brownrigg explained that while new-car dealers are taking deposits and registering cars after January 1, importers of used cars are not even able to do that because they cannot give clients prices.
Moreover, since most of their business entails taking a customer's old car in exchange for a newer one, it is even more important to know the residual values in order to be able to value the old cars.
He said this was not the first time that second-hand car importers had encountered hurdles. The association was set up in 2002 when importers were being asked to show certification that cars were in line with European regulations.
Some years later, rumours circulated that the cars were not genuine and the Malta Transport Authority was checking each car's speedometer. Later, importers were asked to ensure that cars' emissions were in line with European regulations.
Mr Brownrigg said the reason for such obstacles was obvious: the government was being forced by their competitors to limit the success of the sector.
Asked yesterday when the residual values are expected to be published, the Finance Ministry did not reply.
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Albert Bezzina
Dec 20th 2008, 18:17
The last new addition to the document, A14, is the cherry on the cake. With all the environmental claims for the introduction of the new car tax regime, A14 has been tailor made so that foreigners seeking to take up residence in Malta do not have to pay any tax (it is only fair). This provision is being done purely to encourage foreigners to buy from the glut of property in Malta. Does this not encourage more cars on our roads?
Before 2009 is out our Finance Minister and the ADT will have to go back to the drawing board. I advise that looking at things from the consumer point of view AND the environment would lead to a final solution which will conform with EU regulations. In the EU the consumer is King.
Albert Bezzina
Dec 20th 2008, 18:09
How can the new tax regime conform to EU requirements if, should official CO2 emission values for an imported used vehicle are not available, the default maximum category is applied (251g/km) in working out the registration tax due?
Paragraph A13 of the revised budget document gives the definition of a new motor vehicle which includes; “a motor vehicle which has been temporarily registered in another country and had been supplied less than six months after the date of first entry into service, or has traveled less than 6,000 kilometers”. Can the authorities explain how will they guarantee that a private person importing into Malta a new car (within the context of this definition), that the same registration tax will be imposed as is done on a same new vehicle imported by official car importers since the registration value and registration tax of new car imports are not made public?
Albert Bezzina
Dec 20th 2008, 17:41
EU requirements on the method of taxation on used vehicles specify that the tax imposed on a used vehicle imported from another member state shall not exceed the amount of residual tax incorporated in the residual value of a similar vehicle already registered in the national territory. The residual value of a used vehicle in the UK has no relation to the residual value of a similar vehicle already registered in Malta. Using the UK valuation becomes immediately irrelevant. By using the residual value of a vehicle imported from an EU state to work out the registration tax due, using the formulae published in the Budget document, does not in any way deduce the ‘residual tax’ which would be incorporated in a similar vehicle already registered in Malta. The maximum tax due can only be deduced from; the new sale price (in Malta) of the similar vehicle in the year of manufacture of the used imported vehicle, the importation tax or registration tax and VAT (if any) paid in that year on that vehicle once bought by the buyer, and the current market value (local valuation not that in the UK) of the similar vehicle already registered in Malta.
Albert Bezzina
Dec 20th 2008, 17:17
The authorities have lumped valuation of used cars imported from another EU state onto a commercial company specializing in used car evaluations. The ADT refers us to the on-line vehicle evaluation service offered by the UK’s Glass's Car Guide Book (£3.50 per valuation). This has resolved ‘transparency’ issues in the valuation of motor vehicles and it seems that the minimum registration tax provision applied to all imported used vehicles has been modified to exclude those coming from other EU member states. Imports from other, non-EU countries will still have to be subjected to this provision – until importers learn to register them first in another EU state with no registration taxes before being re-shipped to Malta!
The latest addition of the Budget document related to the new tax regime (available on the ADT website) has three new paragraphs; A12 to A14.
A12 claims that this new tax regime conforms to all EU requirements. This claim is unfounded. The European Commission will decide if the new tax regime conforms to all EU requirements and not the Maltese authorities.
Joseph Vassallo
Dec 20th 2008, 12:27
If ADT doesn't take condition into account in its valuations, which of Glass's figures will they use? Glass's also has lower trade prices which tare the basis for warranty-free exports. A whiff of ready cash from a Maltese buyer always gets a bargain.
Obviously, the lowest of Glass's prices is the most likely value but, given the present UK situation (economics + seasonal sales drought), it is probable that even these will not be obtainable and prices will be "behind book".
Auction house sales represent a truer value of any asset, since the real value is that which someone is willing to pay for it. I prefer autotrader.co.uk where I look for prices on offer, balanced by mileage and condition. Invariably, the lowest priced car will sell and others will have to price-match. In 2007, I sold my V6 3ltr Laguna Initiale for £stg 4450, in vgc with 27k mls. When new 4 yrs before, it cost £stg28k+. What would ADT's valuation have been?
So, where Malta is concerned, is it going to be a question of smiling sweetly at the valuer or will it depend on which side of the bed he got out of that morning? And transperancy?
ceri whitley
Dec 20th 2008, 10:08
I am currently importing a used car from UK into Malta.
On the wall of the ADT Inspection offices in Floriana is a notice that has been put by the authorities, and which was published in the Government Gazette.
It states that:
'The Malta Transport Authority wishes to advise the general public that all used Vehicles imported from EU countries will be evaluated for Registration Tax as per the UK Glass's Car Guide Book....'
These valuations can be bought on line from Glass's website for UKP 3.50
It should be noted that it also states;
'The vehicle condition will not be taken into consideration for this evaluation process....'