Maltese Prime Minister To Revise Eco-Friendly Vehicle Tax

by Robert Lee, Tax-News.com, London

18 November 2008

Maltese Prime Minister Lawrence Gonzi has spoken of proposals to amend certain sections of the draft Maltese 2009 budget after protests from the public and opposition parties concerning new car tax measures.

Many members of the Maltese public felt the incidence of the proposed vehicle circulation tax was unfair on those using family vehicles as they carried the same levy as those driving luxury cars. The circulation tax was originally proposed to tackle those using uneconomical cars by introducing a progressive tax system to tax the most unecologically friendly vehicle users most.

Gonzi announced that car registration costs of new petrol 1300cc cars would now be almost half of what they were before, while the saving on registration for petrol cars with engines of between 1500-1700cc would amount to 30% less than previously.

However, following complaints the Prime Minister has agreed that the law on diesel family cars would be amended. Under the former proposals, diesel family cars would have been taxed on a par with less efficient luxury cars because they were seen as environmentally unfriendly. Dr Gonzi said that the government had decided to review the new licence costs for certain diesel cars, to support those who bought them 10-15 years ago when the diesel price was substantially lower than that of petrol.

The government had also received complaints from importers of second hand cars, and Gonzi has agreed to introduce transitional provisions for the new tax law.

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