Car registration VAT refunds could cost €50 million
If the government had to reimburse VAT levied on the registration of vehicles, it would cost Malta about €50 million, in a worst case scenario, Finance Minister Tonio Fenech said yesterday.
However, he stressed it was only the European Court that could declare the imposition of VAT on vehicle registration as illegal and the Maltese government was sticking to its position that it was not.
Mr Fenech said that after the European Commission published its reasoned opinion a year ago on the matter, the Maltese government amended the registration tax system. Once the situation had been changed and corrected, the Commission did not normally proceed with a court case.
He said that, should any individual decide to claim VAT refunds, the government would argue, as it did over the years, that no law was broken and this was not a tax on tax because registration was paid by the importer and VAT by the consumer.
He pointed out that the European Court had decided two cases, one against Denmark and one in favour of The Netherlands. Malta insisted the Dutch case was closest to its situation and, even if the European Court of Justice declared the collection of VAT was illegal, there was no guarantee it would order a refund.
Labour economic affairs spokesman Gavin Gulia accused the government of playing for time and trying to find a loophole so that it would not need to reimburse motorists for VAT paid on registration tax since Malta joined the EU in 2004.
Dr Gulia said EU Commissioner Laszlo Kovacs confirmed that consumers had a right to sue the government for reimbursement of VAT, which was charged in "an abusive manner".
The government's excuses not to reimburse motorists showed it considered Malta to be just a part-time EU member, despite the rights people were promised. The government should immediately launch a scheme to refund the people, without recourse to the courts, he said.
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Alvin Grech
Feb 27th 2009, 08:32
Sitwazzjoni tal-biki!!!
Pure daylight robbery
Ronald Galea
Feb 26th 2009, 20:45
A suitable title for this article could have also been "Govt has stolen €50 million from citizens pockes on VAT for Car Registrations".
Eddie Chandler
Feb 26th 2009, 16:59
I think the present government is heading in the wrong direction, judgeing by the the majority of comments the Maltese who were cheated out their VAT re:car tax are not a happy bunch and that includes most of us outsiders who as it happens brought our family car to these islands & mindyou all taxes have already been paid once in our own country of origin, but i think this present government wants to be a hero think twice cause you will not be getting my vote me ol 'babby not in a million years. (Badly treated foreing resident) Ed.Chandler.
Charles Zammit
Feb 26th 2009, 14:29
Is this not a blatant abuse of power by the government. Is this a grass manifestation of arrogance by masters of borrowed power? Is this not an equally grass manifestation of day robbery by a government who once made us beleive that 'is-sewwa jirbah zgur'? Is this not a clear example of affrontation by the government? The writing is on the wall for all citizens now - every citizens is important as long as the government can squeeze him/her of hard earned money and his/her vote. Gone are the promises of a better living and equal rights on joining the EU. Is it not opportune for those who were robbed of their money to unite and confront this arrogance?
Albert Bezzina
Feb 26th 2009, 14:06
40000 car imports since May 1st 2004 meaning 40000 motorists expecting a VAT refund. At least 20000 contemplating changing their voting preferance! How is that for number crunching. After mother and family I think car and cash come a close third.
Joseph Azzopardi
Feb 26th 2009, 13:27
Dear Minister of Finance, May I ask you what was the reason we were made to believe that being members of the EU was going to be to our advantage? Are we Maltese citizens children of a lesser god. Having Mr Tonio Fenech playing with words shows how the Maltese government treats its citizens......if he thinks he can fool all the people all the time....he is mistaken..
I. Gatt
Feb 26th 2009, 11:56
The finance minister must be living on a different planet to that of ours. When I imported my car 3 years ago I paid a massive registration tax and an equally massive VAT on registration tax. I was the importer and owner of the car and hence both taxes were paid......What is he therefore on about? Rest assured, that I will seek every legal angle to ensure I will get back every cent, that was paid for unjustly
For sure, I have no doubt in my mind where my vote is going or not going next election.....
censu pace
Feb 26th 2009, 11:46
tahwida mill ADT ghax ahna lilhom nafu. Kieku ic-chairman kellu id-decenza dan jirrizenja w il-ministru jkecci erba li ma jafghfux x'qedd jaghmlu. Jmisskom tisthu
Adrian Cardona
Feb 26th 2009, 11:44
so?
I believe the government spent about 10-15 million euros to buy a block of flats in Brussels no one wants to rent, so why is the Finance Minister baulking at giving back 50m of what was not rightfully his?
B.Williams
Feb 26th 2009, 11:35
Short and sweet Mr.Prime Minister :- I want my money back ! with bank interest please if you don't mind - i need it to pay for my furniture transport + my family car, back to Blighty. Thanks verymuch.
Mr.Williams
Kevin Sultana
Feb 26th 2009, 10:41
It is blatantly clear this is just an exercise on words from the ministry, until someday a court sentence puts an end to this ongoing charade.
Minister claims that the VAT collected is lawful due to the fact that the importer is paying the registration tax and the consumer is then paying VAT on the whole sum. Is it not clear to the minister that at the end of the day, that registration tax is being shouldered by the consumer? It's not as if the importer is paying registration tax and not passing it on to the consumer out of goodwill!
I would like to pose a further question to the minister - what is the postion for when a person happens to be both the importer and the consumer?
From his statement above, VAT collected in this manner is illegal, meaning any people out there importing a car for themselves should be getting a refund soon?
Charles J Buttigieg
Feb 26th 2009, 10:39
Quoting our Finance Minister “.............even if the European Court of Justice declared the collection of VAT was illegal, there was no guarantee it would order a refund”. I think that this says it all; I’m alright Jack as you can’t do anything about my illegal position. Arrogance coupled with survival of the fittest.
Michael cutajar
Feb 26th 2009, 10:36
the title says it all. The Nationalist Government, GonziPN stole 50 million euros in just 5 years from the Maltese...the hard working families. Shame Shame Shame
isthi jekk taf tisthi Sur Gvern!
Robert Cassar
Feb 26th 2009, 09:39
It seems that slowly we are moving towards a democratic country, however the government seems to be trying to invent all types of excuses to suck money out of us, but cheer up my follow Maltese citizens as sooner or later it will turn to our favour.
“Quote” the EU commission
I would like to inform you that the commission being aware and concerned of the difficulties that the EU citizens face in connection with the car registration taxes levied in different EU member states on 5 July 2005 presented a proposal for a directive which, inter alia, includes provisions establishing a refund system for registration taxes to be applied on these passenger cars which have been registered in a Member state and are subsequently exported or permanently transferred to another member state. The objective of this measure is twofold: First to avoid double payment of registration taxes, and second to charge registration taxes according t o the use of the car in the member state concerned
“Unquote”
Let see now if the Maltese Government will try to win a Deroga on this too so that they can continue to screw us left right and centre.