Updated | Chamber insists tourism tax ‘administrative nightmare’ with ‘negative commercial effect’

The Malta Chamber of Commerce has maintained its opposition to the tourism tax, despite a court’s ruling refusing a request for a prohibitory injunction against the introduction of the tax.

The Chamber - including the Federated Association of Travel and Tourism Agents (FATTA), the Federation of English Language Teaching Organisations Malta (FELTOM), the Malta Association of Hospitality Executives (MAHE) and the Professional Diving Schools Association (PDSA) - had opposed the way the tax was being introduced which ignored the declared concerns of these organisations and considered only the views of one association.

The Court refused the request on the grounds that the relevant legislation which requires a meaningful consultation on issues which affect the business-operating environment did not apply to a Ministry.

“In fact the Small Business Act (Cap 512) refers to Government departments, government entities and government agencies which are bound by its requirements when it comes to protecting the legitimate interests of the business sector. This now means that when Government wants to have a selective consultation and to choose which stakeholders to consult it can simply assign the legislation to a Ministry to take forward,” the Chamber said.

“It can also simply ignore, as happened in this case, the Administration’s own Directive 6 which also spells out how a consultation process should be carried out.”

The Chamber insisted that the lack of consultation with all stakeholders in the tourism industry has meant that government has a skewed view of the effect the proposed implementation of the Tourism tax will have on the sector.

“It has pampered to the interests of only one association which is certainly not representative of all the tourism industry,” it said.

“The Chamber and the Associations maintain their reservations on the situation which remain and are as real as ever.”

The Chamber insisted that the proposed implementation of the tourism tax will not only create an administrative nightmare but will also have a negative commercial effect on the industry especially with those tourists coming over on prepaid packages. “It will also have a negative effect on the host family sector, which has been included in the collection of this tax, to the detriment of the English Language Teaching sector,” the Chamber said.

“The fact that the Court’s decision was based on a strict interpretation of the law which has resulted in the negation of the spirit of the Small Business Act will only make the Chamber even more convinced on the need to protect the right of meaningful consultation to ensure that the business sector, which underpins the national economic performance, has the best possible operating environment so it can continue to grow and compete in the global market.”

Malta now first and only ELT destination to impose collection of eco-tax on host families - FELTOM

The Federation of English Language Teachers of Malta (FELTOM) has also expressed its regret at the court’s decision, saying that Malta has now become the first and only country to charge eco-contribution taxes on host families.

“In fact, we have already been approached by numerous host families informing us that this could leave them with little alternative but to consider to stop hosting English language learners,” a statement by the federation reads.

They added that the tax could therefore have a dramatic impact on Malta’s current bed stock and consequently, on our overall ELT product and employment in the industry at large.

“We are simply requesting a delay in the introduction to the 1st November 2016. As such FELTOM, and all the other stakeholders represented by Chamber, were never against the principle of an eco-tax but solely against the way this was being introduced by Government without proper consultation with all stakeholders,” the federation said.

It added that the government simply did not consult with all stakeholders.

“Whilst legally entitled to legislate on any fiscal measures, FELTOM felt that if Government truly wanted to act in the national interest, it would have emabarked on a more holistic consultative process arriving at its decision in line with the true spirit of the Small Business Act which exists purely to ensure that all SME’s in Malta are safeguarded against any unilateral measure being introduced.