Used car importers in ‘dire financial state’ after Brexit raises cost of imports

Used car imports from the UK have become more expensive as a result of Brexit, forcing the Malta Car Importers Association to seek government help.

UK car imports form a significant part of the second-hand vehicle market in Malta but recent statistics show that for the first time in many years, there were fewer used cars registered than new vehicles.

Brexit has raised fees, leaving importers “in a dire financial state”, the Malta Car Importers Association said on Tuesday. The association has 75 members and sought government help in a meeting with Finance Minister Clyde Caruana and Transport Minister Ian Borg.

However, government dismissed a proposal by MCIA for Malta to negotiate a derogation from the Brexit withdrawal agreement at EU level.

The association wants Malta to be considered as a disadvantaged state due to the traffic rules inherited from the UK, which mean cars have to be left-hand drive.

MCIA said its suggestion was “immediately dismissed” by government since the European Commission will not be forthcoming on the matter.

“Even though the executive committee insisted to initiate formal discussion on the request, the position from government remained unchanged,” the association reported.

Government will however discuss with the UK to ensure that a double taxation situation with regards to VAT does not occur.

Government will also request an opinion on whether rules of origin apply for goods originating from EU countries, sold to the UK and sold back to EU member states. Should this be the case, according to the Free Trade Agreement with the UK, there would be zero tariffs and zero quotas on goods that comply with the appropriate rules of origin.

Talks between the MCIA and government are expected to continue.