Matthew Xuereb
Used car importers feel the UK pinch
Attrans Ltd said it had experienced a surge in business.
Importers of second hand cars, mostly from Japan, are feeling the pinch as more Maltese turn to UK imports as a result of cheaper registration tax and a favourable pound sterling exchange rate.
Competitive car prices in the UK, coupled with low cost flights, are encouraging some Maltese to purchase vehicles from the UK.
For example, a typical family hatchback manufactured in 2004 with 45,500 miles on the clock may be bought from the UK for £1,975 (€2,204). The buyer would then have to pay registration tax - this can be calculated on www.vehicleregistration.gov.mt - which would be €2,196, as well as transport costs.
Last January, the Malta Transport Authority registered 246 vehicles imported from other EU countries - twice as many cars as it did in January 2008. One reason for the increase was because a number of people who purchased vehicles last year waited to take advantage of the new registration tax system.
Throughout 2008, the ADT registered 1,723 used vehicles compared with 1,346 registered in 2007.
Some have been driving their cars to Malta, while others prefer to commission transporation. A spokesman for Attrans Ltd, a leading car transporter, said the company had experienced a surge in business. Although he could not quantify the increase, he said it was substantial. Transporting a car from the UK normally costs between €500 and €1,000.
A used-car dealer told The Sunday Times that he had seen a "sudden shift" to UK cars because they were generally cheaper.
However, not every car imported from the UK a good buy. For example, registration tax on a luxury four-door 2004 saloon is €20,777, around €600 euros more than the cost of the vehicle itself.
The car dealer also said that the quality of UK cars could not always be guaranteed. He added that that Japanese cars went through stringent investigations to verify their emissions standards and to vet their mileage. Over the past weeks, many furious motorists put pen to paper to complain about the ADT's service regarding the registration of used cars. Some of those buying second-hand vehicles from the UK are being forced to pay VAT twice, since they are being charged 18 per cent of the car's purchase price on which they would have already paid VAT.
The VAT charge is being applied to second-hand cars less than six months old or with less than 6,000 km on the clock since these are considered as 'new' vehicles under the law.
The issue of VAT on car registration gained momentum recently in a reply given by EU Taxation Commissioner Laszlo Kovaks to a parliamentary question by Labour MEP Louis Grech, who asked whether Maltese taxpayers were entitled to refunds on the VAT they paid on vehicle registration.
Mr Kovacs confirmed that Maltese taxpayers can seek redress over taxes collected in breach of EU law. However, he made it clear this was not automatic and had to be decided by national courts.
The Labour Party is insisting that the government reimburses car owners who had paid VAT "illegally".
Popular Stories
Update 3: Woman found dead in car,...
Updated: Woman dies in car crash
Part of Dwejra 'Azure window' collapses
The end of the bar that ‘never closed’
Carm Mifsud Bonnici resigns after...
Bundy does not know whether to...
Updated - Jason Micallef demands...
This WAS the night - Kurt makes it...
Petrol price up 6c
In Discussion
Updated - Jason Micallef demands...
Gozo tunnel could take 5-7 years to...
CABS remote controlled aircraft shot...
Joseph Calleja condemns portrayal of...
Carm Mifsud Bonnici resigns after...
Updated: Labour would give...
CABS drone shot down
Second group of migrants arrives
Adrian Vassallo in scathing...
13 Comments
Post comment
Please sign in or create your Account to post comments.
Paul Preston
Mar 9th 2009, 09:02
Have to laugh "If the car is deemed less than 6 months old and less than 6000km it is considered new" .. In the UK some cars between 3/6mths old can be anything from £2/6000stg less than it's New Price ! .. And up to 3/4yrs old around 45/60% off the original New Price some still under warranty and as new with full service history and mileage of around 30/50000 which is nothing these days .. The UK is currently awash with cars around 3/4yrs old between the £3/7000 price range .. Albeit at the moment the demand for good quality second hand cars in the UK as gone up a lot recently due to New Cars Sales dropping dramatically ! The "Real Bargains" over there are the "As New 3/4yr Old Cars" with fairly low emissions ratings !
chris.Harrison
Mar 9th 2009, 08:54
Matthew Scerri thats is not only your opinion but thousands of others as well,as a matter of fact judgeing by the last few dayd's comments its 100% of the population of Malta and Gozo.
i hope by now that it is sinking in and the ADT are held accountable.
C.Harrison
Karl Abela
Mar 8th 2009, 22:23
@ L Galea .... here is my explanation.... if you care to understand cetain basic economical truths.
If it wasnt for the labour goverment who introduced such duties and for the nationalist government who sought to ease them out gradually, this country's unemployment figures would be more similar to the ones ones in Germany or the UK.
In the past, duties, levies and importation taxes where mostly introduced by the labour government of the 70's and 80's to protect the local agents and manufacturers from the outside world. This state aided monopoly had its advantages because it created a strong local economy, kept the local cash flow going and secured jobs.
Nowadays, as a member of the EU, the government had to gradually ease protection by removing import duties....I repeat....GRADUALLY....until the local business started to stand up on their own feet and compete with the outside world.
So please, lets all stop acting as heroes and know-all's....its very easy to blame the government (any government) when something does not look good....unless you dont have a political motive.
Matthew Scerri
Mar 8th 2009, 17:03
It may be cheaper, but having to pay the cars worth to the govt in tax is still ridiculously expensive in my opinion.
A Camilleri
Mar 8th 2009, 16:25
C A Camilleri - Instead of shying away and saying "....there should be incentives......" why don't you say that 'Government should give incentives.......' or that 'Government should do away with the double VAT payment'. It is a well known fact that double taxation is illegal in the EU and therefore this should be abolished. I would like to see then whether this would instigate the purchase of new cars. This would surely be a 'win win' situation to all the parties that you mention.
While this double taxation is around I will not but a new car, and that's definite. Why should I have to pay €2000 more and over for a popular make of car that is advertised for €9990 or €12000 on Italian tv eg.
But it seems that Government acts with two different measures when quoting and adopting EU policies.
H.Briffa
Mar 8th 2009, 16:15
Yes i agree with the bottom paragraph regarding 2nd.cars imported from the UK and Japan. Yes i too find that cars imported from the UK cannot be compared with better quality tested vehicles from Japan, the local ADT tend to go through stringent checks with proper certificates and authtication for the milage, Co2 em.and general safety of the vehicle. etc., etc., i am not a car dealer but i do own a Japanese car and am talking from experience point of view. Ht Briffa
P.R.Hawkes@
Mar 8th 2009, 15:39
During our short stay in Malta and Gozo, we came across quite a few high powered cars,and big expensive motors, now we think that these people that actually paid high prices for these cars must be either glutten for punishment or out of their tiny mind to drive such expensive wheels on these islands, even if i had to drive a British army challenger 2 tank, i have to think twice in fear or ruining the works. The only source of transport that is suitable for the Maltese roads is the old Horse & Cart, its a bit stiff but there you go, thats our path finding mission on what to buy and not to buy on these dirt roads that resembles the outback. Mr.Peter Hawkes.
Kleaven Maniscalco
Mar 8th 2009, 15:36
A car is afterall a product like any other product. Will I buy a washing machine if I had to pay 200 euros on the 400 it is worth....probably I would have to because it is necessary just like the car. With a public transport with a deplorable service, taxis with sky high prices, the alternative that makes most sense is the car. So whatever price one is charged he will pay. Even if you are buying the cheapest of cars you are ripped off a considerable ammount of cars. I don't agree with the usual excuse that high prices keeps the amount of cars on the road down. This is utter nonsense because I have never seen a person driving 2 cars at once. One may than argue that if prices went down one would have the incentive of buying more than one car. But at least tax the 2nd car of the individual...that will contol congestion.
I have seen these UK imports and I have to say that I agree with Karl Abela, they are in excellent condition and not not all of them are 5 years old. Some are even less than a year old.
L..Galea
Mar 8th 2009, 14:41
Karl Abela
"The real enemy to the customer is not the goverment but the dealer who wants to get rich overnight."
Are you joking?
What about the registration tax running into thousands of euros?
Registration tax in the UK is only £55 sterling which at today's rate is €61.2688, just over Lm26 Karl.
The GOVERNMENT is DAYLIGHT HIGHWAY ROBBING the people with the registration tax and VAT, for although a car may have been used for less than 6 months or has less than 6,000 km, it is still SECOND HAND and VAT has already been paid by the first owner.
It becomes second-hand as soon as it is transferred to the first owner and any subsequent owner should NOT pay VAT.
You should say that we have a HIGHWAY ROBBER for a government Karl.
C A Camilleri, I Abela
Agree with both of you.
James A. Tyrrell
Mar 8th 2009, 13:47
@C A Camilleri. You ask, 'Why do we insist in buying other countries junk...5 years on a car is old.' I have to disagree there. My present car is 10 years old and yet has only 35,000 miles on the clock. I'm actually having £500 worth of work done to the bodywork to take care of some rust around the wheel arches and door bottoms and renew the underseal etc. The car is like new and drives like new and sails through its test every year.
The environment would not be a winner if I were to scrap my perfectly good car and buy a new one. Not only would scrapping my car create a large carbon footprint you also have to consider the CO2 created by manufacturing the new one. The few extra miles per gallon from a more efficient engine would never offset this.
I do a very small mileage every year, typically under 2000 so in ten years time my car will be 20 years old with less than 55,000 miles on the clock. I have always found that if you look after things they will pay you back in the long run.
Karl Abela
Mar 8th 2009, 11:48
'A used-car dealer told The Sunday Times that he had seen a "sudden shift" to UK cars because they were generally cheaper.'...........rather than sudden, I would say that it was the expected and the obvious course that the Maltese EU citizen has now come to expect: LIBERALISATION.
If used car dealers want to compete they should switch to UK imports, which from what I have seen locally, are in immaculate condition, best of standards, and cheapest around. The real enemy to the customer is not the goverment but the dealer who wants to get rich overnight.
I Abela
Mar 8th 2009, 10:56
C A Camilleri - We insist on buying other countries junks because our government is making it impossible for us to buy a brand new car locally. Our government is charging us one of the highest registration tax in the world, also (probably illegally) charging us another 18% VAT over and above the registration tax. While the state of our roads is disastrous. So tell me why should I buy a brand new vehicle for 20,000 Euro, to start breaking it apart from the very moment I drive out of the showroom?
C A Camilleri
Mar 8th 2009, 09:58
Why do we insist in buying other countries junk...5 years on a car is old. Why do you think are they sold in the first place? Instead there should be incentives to buy new, less powerful cars. Like that everyone wins, the buyer, the seller, the government and above all the environment.