The European Commission is expecting the government to carry out further changes to Malta’s new car registration scheme before it approves the new law, The Sunday Times has learnt.

A new tax registration scheme, introduced nearly two years ago, aimed to bring Malta’s laws in this sector in line with EU legislation.

The commission sent another letter to the Maltese authorities at the end of last month asking for more information about certain aspects of the new law, a spokesman for the commission said.

However, the EU executive said it could not provide more information at this stage since infringement proceedings against Malta were still pending.

Sources close to the commission said, however, that the outstanding issue concerned the way the new law treats the registration value of motor vehicles and particularly how the depreciation value is calculated.

The first indication that Brussels was still not satisfied with the new Maltese car taxation regime was given recently to Nationalist MEP Simon Busuttil in the European Parliament.

Taxation Commissioner Algirdas Semeta told Dr Busuttil that although the commission had received detailed information on the subject and that the Maltese authorities had dealt with most of the commission’s remarks, the problem of depreciation of new passenger cars had not been solved.

Following infringement procedures started against Malta in 2007, the government had made radical changes to the local vehicle registration rules and started implementing them from the beginning of 2009.

The new system is now based on more environmental concerns. The registration value of cars imported into Malta, both new and second-hand, now varies according to emission levels, engine size and length.

The new system has brought some major benefits to Maltese clients and the price of certain new cars, particularly those with good emission performance and small engines, has dropped substantially.

The importation of second-hand luxury cars from the UK has also risen sharply in the past two years as taxes paid on registration was also substantially lowered. Consequently, this dealt a blow to importers of new cars who have seen orders drop.