Labour leader Joseph Muscat yesterday pledged to help citizens sue the government to claw back the VAT it has "illegally" charged them on vehicle registration since Malta joined the EU in 2004.
The opposition party invited people who bought cars after May 1, 2004, to add their name to a suit which would be funded by the party.
It said the decision had been taken after the government "stubbornly refused" to refund this money, which is estimated to amount to some €50 million, despite suggestions by the European Commission that it should do so, Dr Muscat said.
The pledge came after EU Taxation Commissioner Laszlo Kovaks earlier this week said car owners who paid VAT over and above the normal registration tax on new or second-hand cars since Malta's EU accession may claim a refund as the levied tax contravened EU law.
Commission sources cautioned that this would not be a straightforward exercise because the affected taxpayers would first have to file a court case and convince the court that they had in fact paid the "illegal" tax.
The government insisted that the tax was not illegal and that Labour was irresponsible to lead people to believe they were somehow eligible for an automatic refund.
Finance Minister Tonio Fenech said the government was not in breach of EU laws, pointing out that the matter would have to be decided by the European Court of Justice.
Replying to the latest initiative by the Labour Party, the Finance Ministry accused Dr Muscat of acting irresponsibly. It said the opposition did not recognise what the country's real priorities were in the current global economic crisis.
The Labour Party, the ministry said, was trying to force the government to pay out money which no judicial authority had ordered it to. The consequence would be that new taxes would have to be imposed to make good for the €50 million shortfall the pay-out would leave in State finances.
Alternattiva Demokratika yesterday aligned itself with Labour's position and asked people wanting to challenge the government's position to write to the party.
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