Opposition spokesman on industry and foreign investment Carmelo Abela told Parliament on Wednesday that the opposition was insisting that the government reimburses car owners who had paid VAT over and above their car registration tax so that Malta would be in line with the EU - not only in words but also in practice.
Speaking during the debate on second reading of the Motor Vehicles Registration Act (Amendment) Bill, Mr Abela said it was still very evident that the Maltese consumer did not enjoy the same rights as fellow EU citizens. It was important for Malta to come into line with EU standards.
The polluter-pays principle was not being well managed, even if more and more people agreed with it. This was similar to the way the eco-tax was being levied, in spite of good intentions.
The government was arguing on legalisms. Before the general elections everything had been said to be possible and money was not a problem, but the people now knew they had been tricked. Instead of trying to run away from the principle of refunding erroneously-levied taxes because money was now a problem, the government should be trying to see how the refund could be made.
If every vehicle was being subjected to regular VRT, how was it that certain vehicles were still on the roads? Was the VRT being ineffective, or was it just a revenue earner?
Mr Abela said it was possible that the government was availing itself of the environment as a buzzword but using it for revenue purposes. This was wrong.
There were Maltese who were fixated on their vehicles, including periodically changing the engine. If one changed to a more environmentally-friendly engine, it would be wrong to go simply by the year of the body's manufacture. This should be reviewed in the tax schedule.
The motorist should be given better service, even in the way roads were rebuilt. Too many two-carriageway roads had been reduced to one carriageway, which invariably wrought havoc with every traffic accident or even mechanical trouble with a vehicle. It was surprising how changes in policy came about with almost every change of minister.
Mr Abela said not everybody could change their vehicles. What incentives were there for somebody to change or even scrap vehicles? Costs inherent in purchasing a vehicle were prohibitive when compared to those overseas. Taxation according to the age of a car did not constitute such an incentive. Malta needed such serious incentives badly.
Earlier, opposition whip Joe Mizzi said that neither the general public nor importers of second-hand cars had been informed of what was already in store. And harsher standards for vehicles are earmarked by 2012. This meant that the importation of vehicles from Japan, or even from other EU member states, would be drastically affected.
The opposition was critical of the government for keeping silent on impending changes, especially when general elections were in the offing. Moreover, the government made exemptions for its own vehicles. Such a policy was unacceptable in the light of official pronouncements on energy saving and other aspects.
The opposition was basically in agreement with the Bill in its technical aspects, but not with the way it would be implemented, and it should be amended to leave no loopholes for corruption.
The Bill went against the requirements of a free market, as well as against the four freedoms. The government was using every ruse in order to be able to impose more taxes on the people.
Mr Mizzi pointed out that even new cars caused emissions, but the way the government was acting was in breach of EU rules on fair competition as it was applying different conditions to favour one sector over another. The taxes it was imposing were based on principles that went against social justice.
The government's measures paid no attention to the use that would be made of each vehicle. A Sunday driver would be paying more than a daily user. If it really wanted to reduce pollution the government would have allowed the importation of other fuels, which had not even been mentioned. It would also have found some means of reducing congestion on the roads.
One wondered how many vehicles would still be usable by families after implementation of the new EU standards. The proposals would obviously be restricting the second-hand market, with dire consequences.
Instead of recognising that the people's income was being eroded on several pretexts, such as costlier fuel and higher insurance, the government was continuing to erode consumer confidence. Instead of pumping money to benefit the consumer, he was being riddled with taxes. There was no social soul in the government. The Bill bore no reference to social effects. The government simply continued to tax to make amends for recession.
The government was reaping millions in licences and tickets. But the outlay on road maintenance was less than four per cent of the revenue. Had the government forgotten its onus of seeing that roads were also in conformity to EU standards?
The government had clearly paid no attention to public transport. More than 60 per cent of the fleet were not in conformity with EU rules. The government had continued to subsidise public transport against de minimis rules.
In the face of such problems, the people always turned to the Labour opposition, which could do little except criticise, suggest and fight for people's rights, as it was doing in the utility tariffs saga.
Leo Brincat (PL) said the government's intention was supposed to be the polluter-pays principle, with which the opposition agreed. But the picture was now appearing to be different.
The car registration scheme could only be seen as a new way of continuing to tax at the same levels as before. Mr Fenech had said the circulation tax would be commensurate with pollution levels. A vehicle could pollute without emissions and not create toxic gases.
Practical means should be used to distinguish between extravagant car users and others who used their cars moderately. It was better to look at the VRT in an analytic manner.
He could not understand how the government raised taxation for hybrid cars and was encouraging importation of more high-powered cars. One had to embark on educational campaigns to convince people to use cars less frequently. Importers had been left in limbo for months. One needed to address the circulation tax and look also at cars owned by government entities if the reform was to succeed.
The government had to consider and enforce car labelling based on CO2 emissions. Vehicle importers had to be penalised if they were found guilty of giving misleading information in advertisements. Studies on such subjects, also commissioned by the government, should be published. He asked whether the government had included recommendations from a report by Martin Scicluna and George Debono.
The government should educate the consumer on CO2 emission rankings.
Sport utility vehicles were banned in certain countries because of harm to the environment. One had to look at used cars which were often owned by elderly and people who were possibly socially disadvantaged. The government's bias should be on high-powered vehicles and those with heavy CO2 emissions.
Concluding, Mr Brincat said the government had to address the problem holistically to be able to implement the Kyoto targets.
Nationalist MP Ċensu Galea said there were 280,000 vehicles on the roads. Revenue from the registration tax was channelled into road infrastructure and into other government programmes. Cars might be cheaper in other countries because they were locally manufactured and not imported, as was the case in Malta.
The recommendations on road construction, submitted by German experts who had been in Malta since 1998, had been and were still being implemented.
Mr Galea said that the government had invested heavily in public transport and this resulted in having better buses. One must establish the criteria which had to be used in issuing conformity certificates by manufacturers. Pollution levels had to be known across the board.
He referred to fines on non-payment of licences within the established timeframe and on other infringements. One had to check on the amount of fines to be paid, giving guarantees that the law would not be abused by administrators.
Those administering the legislation had to acknowledge the implications of the changes being made. Those seeking to buy new or used cars had to be given full and correct information. It was important that the definitions and schemes provided in the Bill be clearly understood by those administrating the law.