David Camilleri from Rabat correctly lamented (March 7) that the VAT Department had not replied to his queries regarding the refund on bicycles. As it turns out, the policy to refund VAT paid on bicycles did come to an end towards the end of 2011.
The Bicycle Advocacy Group (BAG) takes this opportunity to applaud the government for embarking on such a scheme whereby cyclists were given a financial incentive and returned 15.25 per cent of the VAT paid by those who purchased a new bicycle.
As local media report, through this financial incentive the government has refunded €117,000 in VAT, which was distributed over 2,695 new bicycle purchases. This measure has been a great success and has contributed to the increase of emission-free bicycles on our roads.
The policy to refund VAT on bicycles did come to an end in late 2011
However, BAG has been disappointed with the news that this financial incentive was withdrawn and that there will be no more refunds on new bicycles. Although BAG is not insisting that the government should always refund VAT paid on new bicycles, the group calls upon the ministry responsible for transport to make other financial incentives or allocate resources aimed at increasing the use of bicycles.
By investing in cyclists and encouraging cycling, the government will also be:
Encouraging a healthy lifestyle, both for cyclists themselves and for the public due to higher levels of physical exercise and less pollution produced;
Decreasing traffic jams, which often grind traffic to a halt in the early morning and evening hours, by having more space on the road; and
Contributing to the Maltese economy by reducing fuel purchases from abroad in the form of petrol for privately owned motorised vehicles.
BAG therefore encourages the government to allocate resources for the purpose of encouraging cycling in Malta.
Whether such money is to be used in VAT refunds or for other measures, such as better cycling routes, is at the government’s discretion. However, the group would like to see fiscal measures relating to bicycles at less than those for electric vehicles as a minimum, because emission free vehicles and more incentives, such as the VAT refund scheme, need to be in place to encourage cycling as a means of commuting.