The “hefty” registration tax on imported cars needs to be reduced to be in line with the rest of the EU, according to the car importer’s association.
“Our members will continue to do their utmost to ensure that retail prices of new motor vehicles become closer to those of our European counterparts. This, however, can only be attained by revising the registration tax,” association chairman Joseph Gasan said.
Mr Gasan was reacting to comments made by customers that new cars in Malta were more expensive than in Europe.
He was quick to add that most people knew that Malta’s “complicated tax regime” tied importers’ hand, forcing prices up.
Every new vehicle imported to Malta is subject to registration tax, which is worked out using a formula based on emission levels, the vehicle’s size and the VAT paid.
European Commission figures published earlier this year revealed that, on average, Malta has the highest vehicle taxation rate in the EU.
Last year this newspaper had reported car importers’ complaints over the level of tax on vehicles, with many saying this was putting people off buying new cars.
EU figures published back in 2013 revealed that car prices had remained stable in Malta, while they dropped in 24 other EU countries. The EU price index for cars had shown that ,while the EU average had dropped by 2.5 per cent, it had barely budged in Malta.
Mr Gasan said that the association had long lamented the “disparity” between owning a car in Malta and overseas and had lobbied different administrations, including the current one, to revise the tax regime.
In fact, this was one of the main recommendations the association had put forward to the authorities during a recent business breakfast to launch its strategic plan for the motor industry.
Meanwhile, the association was working with the government to introduce a new scrappage scheme which Mr Gasan hopes will incentivise customers to buy new vehicles.
Mr Gasan said such incentives should become a permanent feature as they helped the country on a number of levels.
Returning to customers’ complaints, Mr Gasan said that, when buying a car locally, one needed to be careful when comparing prices with other countries.
“It is important to compare like with like. Although the model of the car may seem similar, there might be differences which may not be immediately apparent,” he said. These included engine specifications, basic options plus other optional equipment which may or may not be deemed necessary to include.
For example, a common standard feature on new cars in Malta was air-conditioning. In the UK this might not be a priority and will hence not feature as standard equipment, he said.
In 2015, 21,260 cars were registered in Malta, of which only 9,321 were new.