Call for end to abuse of car registration concession

The car-rental industry is concerned at the "cancerous" ongoing abuse by a very few holders of public service garage permits, the general secretary of the Rent-A-Car-Association said.

Emanuel Mallia spoke in reaction to an article in The Times on Wednesday about an investigation into abuse relating to permits through which people were registering personal cars as being self-drive or chauffeur-driven, in an attempt to benefit from the concession the government granted the car rental industry.

The long-sought and much awaited concession, Dr Mallia explained, laid down that cars registered for self-drive and chauffeur-driven rental should pay a fixed 30 per cent registration fee on the vehicle's CIF (cost, insurance and freight) value, irrespective of its cubic capacity.

This meant that registering a car as self-drive or chauffeur-driven would amount to a saving of about Lm765 on a small car and of over Lm5,000 on a car with a capacity of over 2000cc.

"Rent-A-Car-Association (RACA) is very happy to hear that action is finally being taken by the authorities to find out the real culprits, namely those who have acted in breach of the regulations. It is, after all, what RACA has been advocating, both in its correspondence with the authorities and in various reports presented during its annual general meetings.

"RACA is against a middle of the line solution but advocates direct action against anyone who is abusing. These people are easily identifiable. RACA has been suggesting harsh penalties, including confiscation of the vehicles concerned," Dr Mallia said.

He proposed that the authorities carry out a full survey of the realistic and effective number of public service garage permits and do away with all the dormant and ineffective ones.

Dr Mallia also proposed that any permit holder who applied for a K-plate (for self-drive rental) or Y-plate (chauffeur-driven) should be made to sign a declaration that the vehicle was truly to be used for rental purposes so that, if found in breach, that person would be criminally liable.

He also called on the authorities to ensure that any second-hand car dealers or importers of new cars who happened to be holders of a public service garage permit, either directly or through another company, truly operated such permits for the sole aim for which they were intended.

Dr Mallia agreed with what Transport Minister Censu Galea told The Times, that the concession encouraged garage owners to upgrade their fleet and to offer a better service across the board.

When the abuse of the concession was detected the association immediately alerted the authorities. It was discovered that for someone to abuse the system one must first of all have access to a public service garage permit.

This constituted the first problem that needed to be looked into because, Dr Mallia explained, the number of public service garage permits in Malta ran into hundreds, many of which were not effectively in operation. A "clean sweep" of the permits was needed, he said. But who, among the permit holders, were the abusers?

Dr Mallia said that although he could not generalise, RACA could safely conclude it was not its members who were abusing the system. It was not in their interest to risk losing the concession granted by the government.

"It is the mala fede operator, for whom car-rental is not the principal line of business, who is abusing the system since he has nothing to lose," he said.

In order to curtail this abuse RACA, through negotiations with Finance Minister John Dalli and Mr Galea, had set up a sub-committee through which the former director general at the licensing office, Paul Galea, and Dr Mallia received complaints about who was abusing the K-plate registration.

The experiment was a success in that it curbed the abuse of the K-plate and a lot of individuals were made to re-register their cars for personal use, hence paying the full registration fees.

But then the abuse of the Y-plates started creeping in and once again RACA approached the Malta Transport Authority to repeat the experiment carried out with Mr Galea on the K-plates. However, the request was turned down.

Dr Mallia said that those abusing the regulations could be easily identified.

He referred to certain businessmen who could be seen driving Y-plate luxurious cars when it was clear they had not become chauffeurs to carry passengers against payment.

"These cars are fully equipped with extras. Some have high powered petrol engines which goes to show they are not economically viable to carry passengers. Obviously they were not purchased for this purpose.

"People driving these cars should not only be in possession of a special driving licence but also be employed as drivers with a public service garage permit holder.

"Some cars display German number plates while in reality they were registered as K- or Y-plated cars," he said.

Dr Mallia also referred to the fact that in order to apply for a pubic service garage permit one had to possess only two cars. RACA had been appealing to the authorities to raise the number to at least 20 - this would be more economically viable.

This measure also served as an incentive to whoever may be inclined to abuse the system, he said.

"As an association we have been protesting all this because if the government, with RACA's assistance, does not curtail this abuse there is a risk that the bona fide operator, who is not abusing the system, will lose the concession."

A suspicious Y-plate driver should be asked to produce his work book and special driving licence, and he should be asked to prove that his car was being used for profitable business by producing a list of the trips and the VAT receipts. Besides, the cars should be certified by the tax compliance unit.

"We as an association want a good product and good image. We worked very hard for it. Our product is on the road and is there for all to see and our image is there with it," Dr Mallia said.