Reaction to GRTU statement on eco-contribution

In a media release on Friday, the FOI expressed surprise at a GRTU press release indicating the association's satisfaction about the mechanics of the eco-contribution law and that it has now withdrawn all its objections to its immediate implementation.

The FOI repeated its opinions on the economic implications of the eco-contribution and its effects on the country's competitiveness. The federation has been consistent and clear in its position over the years: it is against any form of additional tax because taxation in Malta is already too high.

If this eco-contribution turns out to be a new tax on the general consumer, it will have a consequential increase on the cost of living, an effect on statutory wage increases, and a reduction in the consumer's spending power.

The country is already pricing itself out of the market for exports of both goods and services through self-induced inflation caused by high taxation and wage increases that are not productivity-related.

The FOI therefore appealed to all the social partners to consider seriously the implications of the eco-contribution in the context of the country's competitiveness and that they should work together to preserve this, if the economy is to make any progress.

Some weeks ago the FOI had come out with the suggestion to Government for the setting up of a technical commission. Its function was to assess the economic implications of the eco-contribution, to assess waste packaging recovery schemes; and generally to keep down costs for enterprise and consumers alike, while minimising bureaucracy in the implementation of the law. The FOI urged Government to appoint the commission without further delay.

While the FOI understands Government's social obligations to safeguard the environment by making polluters pay, it is insisting that a balance be found for the proposed eco-contribution, through compensatory measures to both manufacturing and service industry.

Only this type of approach will send a clear message to enterprises and consumers alike that this is not just another excuse for Government to increase taxation, but a genuine effort to solve the country's environment problems.

These conditions have so far not been satisfied. Therefore the FOI again reminded Government that it still has to address seriously the main issues relating to increased taxation and industry's competitiveness.