Government urged to reconsider passenger service charge

The Federated Association of Travel and Tourism Agents (FATTA) last week called on the government to reconsider the way it has imposed the increase in the passenger service charge, announced in Legal Notice 60 of 2005.

The association has reserved its right to take further action, including before the EU Commission, with the support of the European Travel Agents' and Tour Operators' Association (ECTAA), of which FATTA is a full member.

In a judicial protest filed in the First Hall of the Civil Court, FATTA held the Finance Minister, the Minister for Competitiveness and Communication, and the Attorney General responsible for any damages which the association and its members would suffer as a result of the Lm10 increase in the charge, which comes into effect on August 1.

According to LN 60, the passenger service charge, which is going up to Lm20, is applied to Maltese citizens who leave Malta by air. FATTA holds that the charge is a misnomer since each passenger is already levied a service charged for using Malta International Airport, so the Lm10 increase in the charge is in reality a "passenger service tax" or, as it is more commonly known, a "departure tax".

The charge also goes against a number of EU laws, in particular those regulating fair competition and state aid, the provisions of the free movement of services and the free movement of every EU citizen.

Since the charge is applicable only to outgoing travel by air and not by sea, FATTA considers this gives the cruise liner sector an unfair advantage, besides providing the outgoing tourism industry with state aid for the industry servicing those who would be going abroad by sea.

FATTA has emphasised that the free movement of services was being restricted since those who enjoy a trade licence from the Malta Tourism Authority (MTA) to provide travel agency services and the Maltese who use these services are being discriminated against. This could also cause a barrier to trade to foreign services companies wishing to offer their services in the local tourism industry, making it not commercially viable for them to do so.

The free movement of Maltese and Gozitans was being hampered since air travel was one of the main means of transport away from the Maltese Islands.

FATTA noted in its judicial protest that, since the announcement in the 2005 Budget of the increase in the charge, two Maltese MEPs, Simon Busuttil and Joseph Muscat, had expressed themselves publicly against it.

The association said the charge would have a negative impact on the outgoing tourism business by air since fewer Maltese would travel.