Economy Minister: eco-tax has to be revised

While traders urge government to remove it, Economy Minister says eco-tax is also about social and environmental responsibility

Chris Cardona at Chamber of Commerce

Minister for the Economy Chris Cardona has called for a revision of the eco-tax, bringing about a level-playing field and exposing illegal imports.

The government has been inundated with requests to remove or modify the eco-tax imposed on goods imported from Sicily.

While one minister, Edward Scicluna, called for “a well-thought solution” to combat unfair competition, Cardona argued that eco-tax shouldn’t become an obstacle to local importers or an impediment to competitiveness.

Social partners, including the GRTU, the small business chamber, and the Chamber of Commerce, have submitted a plethora of Budget 2015 recommendations over what they perceive as an “unfair” tax which creates an uneven playing field for retailers.

There currently exist inconsistencies in definition and application of laws and legal terms between EU states, and procedures adopted at different points of the Grand Harbour that are not uniform. These inconsistencies are giving rise to unfair competition.

A number of foreign and Maltese traders evade VAT, excise duties and eco-tax by importing goods using the catamaran link between Malta and Sicily.
Unlike goods which reach Malta through the Freeport, goods transported on the catamaran are not controlled.

“The government’s position is that there must be a level-playing field. The eco-tax should be an indicator to what’s being imported legally compared to illegal imports,” Cardona said.

The Ministry for Finance insisted that well-thought out solutions were needed so as to avoid exposing the government to an EU infringement.

“Obviously this is a subject that concerns the European Union as well since we are part of the free trade. As government we have to ensure that the eco tax doesn’t become an obstacle to local importers and their competitiveness,” Cardona added.

He said that eco-tax had to be revised, and used as an instrument to even out the playing field between those who pay all vat contribution, income tax and eco tax and those who don’t.

“The eco tax also has its social and environmental responsibility and the discussion of its revision should be about how to balance it out.”

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