With an average age of 12 years, cars in Malta are among the oldest in Europe and this has prompted the government to launch more initiatives to continue driving such vehicles off the roads and promote cleaner air.
People scrapping their old cars to buy new ones will get a refund of 15.25 per cent of the car value according to the make, up to a maximum of €2,000
A new tax regime will come into force on January 1 and will see an increase in the registration tax of vehicles with a Euro I and Euro III engines, considered to pollute more than the modern Euro V models.
However, there was no mention of the extent of such an increase in the Budget speech.
The regime on Euro IV and Euro V engines remain unchanged.
This initiative comes hot on the heels of a similar tax regime for polluting vehicles introduced earlier this year but limited only to commercial vehicles.
The new registration tax for private cars will be calculated on the Euro standard, carbon dioxide and particulate matter emissions, length and value of the car, according to the make.
Along with this measure, for the second year running, people are being given an incentive to get rid of their old, polluting cars and replace them with smaller and more environment-friendly vehicles.
Last year, the original target of 2,000 cars was reached in a matter of months and was extended by another 1,000. In October, this was also taken up and the scheme was suspended.
While the scheme was in force, about 19 per cent of cars registered this year were of the Euro I to III type or older, pushing the government to revise the tax regime for vehicles with this kind of emissions standard.
People who scrap their old car to buy a new one will be given a refund amounting to 15.25 per cent of the car value according to the make, up to a maximum of €2,000.
The car will have to be new and with a Euro V engine or better, with a low level of emissions and smaller than the stipulated length.
The scheme will come into force on December 1 and will remain open for a period of one year or until 3,000 people would have applied for it.
This year’s scheme, announced in the Budget 2011, saw car agents and dealers forking out €600 of the €2,000 rebate in return for a vehicle that was at least 10 years old.
The scheme, which has remained unchanged, was meant to encourage the purchase of small cars but the parameters did not restrict the choice to city cars. Bigger and compact executive cars, such as the Ford Focus and the BMW Series 1, as well as the Ford C-Max and the Citroen Picasso fell within the parameters. Even the Peugeot 308, a small family car, fits squarely within the scheme.
Importers of brand new cars had long been complaining of a slump in their sales, especially since many started opting for second-hand vehicles imported from the UK and Japan because of a favourable exchange rate when the sterling was weak.
Successive budgets have helped importers improve sales through various initiatives, including the reform of the car registration tax, which made new cars cheaper and second-hand ones more expensive to register.