Registered vehicle tax here to stay, despite call by PL MEP

The government has no plans to remove the vehicle registration tax despite a Labour MEP calling for its abolition, this newspaper has learnt.

In a statement issued a few days ago, Joseph Cuschieri, who is also the head of the Labour delegation in the European Parliament, called for the “immediate” removal of what he described as an “unjust tax”, arguing that this would convey a “strong message” to other member states.

The government has recently unveiled a scheme through which it will refund €31 million as part of its pledge to give back the VAT paid on the registration tax for the purchase of cars between 2004 and 2008.

But no mention of removing the registration tax itself was ever made.

No plans to remove this tax are in the pipeline

However, Mr Cuschieri’s call raised questions as to whether the government was considering such a move.

Questioned by Times of Malta, a Finance Ministry spokesman said that no such plans were in the pipeline.

Estimates based on official government figures show abolishing this tax would result in the loss of some €40 million a year in government revenue.

According to the 2014 financial estimates, the government raked in €37,025,558 from the tax in 2012 while the approved estimate for last year was €42.3 million. The projected revenue for this year is of €39.5 million.

Finance shadow minister Tonio Fenech said taking such a measure would be welcome, so long as it would not impact negatively the country’s financial situation.

In 2009 the European Commission had referred Poland to the European Court of Justice arguing that the Polish authorities should not have included the registration tax in the taxable amount of VAT.

A year later the ECJ turned down the Commission’s request, ruling that member states were free to decide on fiscal matters.