'No decision against Malta on vehicle VAT registration'

Finance Minister Tonio Fenech yesterday reiterated that no decision had been taken by the European Commission against the Maltese government with regard to VAT on vehicle registration.

Moving the debate in second reading of the Motor Vehicles Registration Tax (Amendment) Bill, Mr Fenech gave a point-by-point account of what had transpired between the Commission and Malta during the past two years, and repeatedly said that up to now the government had not been found at fault on the issue.

He accused the opposition of spinning a reply by Commissioner Kovacks to a parliamentary question put by Labour MEP Louis Grech.

Saying that the PL had misinterpreted the reply, the minister said Commissioner Laszlo Kovacs had said that the Commission was instituting infringement procedures against Malta. It had received information on legal amendments and was analysing it.

What the Commission had given was a reasoned opinion. This was different from a decision, said Mr Fenech. This was confirmed by Labour deputy leader Tony Abela, who said that a decision had not yet been taken although there was a decision against the Danish government.

As regards reimbursement claims, Commissioner Kovacs had only said that the Commission considered that taxpayers might seek redress under national law. Minister Fenech accused the opposition of being disloyal in its statement, and the version given by MEP Louis Grech was an invention of his imagination.

Judgement on a directive infringement could be given only by the European Court, and not by the Commission. There was no doubt that no decision had been taken against the Maltese government.

Mr Fenech said the government did not agree with the opinion given by the Commission.

The problem arising from VAT on vehicle registration had not been identified when the screening process of the conformity of Maltese with European law was held before membership. The European system on car registration was not harmonised. It was only in 2007 that the government was notified about the aspects of car registration which the Commission needed to analyse. The reasoned opinion had been given in February 2008.

If necessary, the Maltese government was ready to defend its position in the European Court. In the government's opinion there was a clear distinction between the Danish and the Malta issues.

Minister Fenech said that the government had decided to address the issue as of 2009. The reform also addressed the doubts expressed by the European Commission.

He argued that the European Court had not always agreed with the Commission, saying there were instances in which appeals by member states had been upheld.