The GRTU is making an eleventh hour effort to ensure that eco-contribution is removed in the next Budget. The Chamber of Commerce, Enterprise and Industry is supporting its initiative, the GRTU said.

The promise to remove the tax had been mentioned in the last Budget and Environment Minister Leo Brincat said last week in a speech that the time had come for this promise to be fulfilled. He referred to the setting up of a working group a few weeks ago which has now prepared a report on waste prevention – as the solution had to be a holistic one.

GRTU chief executive officer Abigail Mamo explained that eco-contribution was “a Maltese invention” which has nothing to do with the EU and is not found in other ­member states.

Eco-contribution was introduced in 2004, based on the ‘polluter pays’ principle, ostensibly making importers pay towards the recycling or treatment of a list of items ranging from beverage containers and mattresses to car tyres and fridges. It ranges from a few cents to €69.88 per item.

The GRTU is concerned about eco-contribution for a number of reasons. Because it is a uniquely Maltese tax, local importers are at a disadvantage when it comes to online purchases, for example, and are clearly unable to compete fairly with those who import goods illegally.

“Traders coming in on the catamaran are not subjected to the same checks and inspections as those who use other importing channels. They should by law be reporting and paying eco-contribution but how many do? How many get caught?

“Those who evade this tax are saving a lot of money and are able to undercut the prices of those who do pay it,” Ms Mamo said.

“It also affects online purchases. If you buy a tablet from Malta, the trader will have paid eco-contribution on it. But if you buy it over the internet, the foreign trader does not have had to pay it, making it automatically cheaper.”

Because it is a uniquely Maltese tax, local importers are at a disadvantage when it comes to online purchases

It is also irritated because the €7.8 million collected from eco-contribution does not seem to be spent on recycling on waste treatment, but just gets swallowed up in government spending. Questions to the Environment Ministry on the use of the funds were not answered.

However, one of the major concerns is that Malta is already facing infringement procedures over delays in applying the EU’s Waste Electrical and Electronic Equipment (WEEE) directive, which basically covers anything that is plugged into electricity – many items of which would be now subject to eco-­contribution.

“If we have both running in parallel, importers would be paying twice for the same thing!” she said. “At least with WEEE, importers would be paying the same as companies in other member states, which levels out the playing field. But the government would only bring in some €3-4 million. We believe that this is all about the €7.8 million that the government would forfeit.”

The ministry acknowledged that the duplication was a concern. Minister Brincat replied to questions about the removal of eco-contribution, saying: “In view of stakeholders’ general feel that the business community is subjected to a dual ‘eco tax’ as implemented by previous governments, this administration is evaluating options to review the situation in a way that this contribution does not hinder with the full implementation of the WEEE directive while ensuring that EU directives are fully honoured.”

It does not help that the eco-contribution tariffs do not always make sense. For example, the eco-contribution on a cot mattress and a large king size mattress is €6.99. Some of the tariffs are also outdated, particularly on electronic goods whose costs has come down dramatically since 2004, making the eco-contribution disproportionate, the GRTU argued. For example, the eco-tax on a tablet is €35.

“Tablets did not exist when legislation was out so the eco-contribution was extrapolated from the tax on a bulky computer tower. And the tax is €11.60 on a printer which costs just £35 now,” she said, adding that the recyclability of some items had also changed dramatically since then.

The impact of the tax is compounded by the fact that VAT is charged on the amount including eco-contribution. For a €60 tablet with a 25 per cent markup, VAT would be charged on the total amount.

“So if the eco-contribution of €35 were removed, the tablet would be €41 cheaper,” she explained.