The government has been urged to reduce the annual vehicle circulation licence fee for those car owners who drive their cars for less than 1,500 miles or 2,500 kilometres per year.

The Malta Automobile Club said such a measure could encourage motorists to reduce the use of their cars, thus easing road congestion. 

Transport Minister Joe Mizzi has told the club that the proposal is being given its due attention.

The club said vehicle taxation in Malta – registration tax and annual circulation licence tax – is the highest among the EU member states as a percentage of total taxation at 3.49 per cent. The EU 28 average is 1.26 per cent.  

Apart from the revenue from vehicle taxation, the government raised more than €106 million from duties on petrol and diesel between January and September.

The club pointed out that vehicle taxation is supposed to cover the cost of road construction and improvements, but only a small fraction of the revenue is actually used for that purpose.

It asked what happens to the remaining funds.