Malta ranks 1st in vehicle taxation as percentage of total taxation in EU-28

“Environmental taxes [in Malta] are relatively high (Malta 3.0% of GDP, EU-28 2.4% of GDP). The high level of environmental tax revenue is attributable to taxation on transport excluding fuel (1.3% of GDP, EU-28 0.5%), while revenue from taxation on energy is in line with the EU average (1.6%, EU-28 1.8%).” [page 119].

This clearly shows that car owners are paying a very heavy rate of taxation on their vehicles, both as a percentage of Gross Domestic Product – where Malta ranks second, as well as a percentage of total taxation – where Malta ranks first!

Transport taxes, excluding fuel, refer to the ownership and use of motor vehicles. In other words, they refer to the vehicle registration tax and the annual circulation licence tax, and other related taxes.

Malta’s high vehicle taxation has been confirmed once again by the European Union, as published in the 2014 edition of the Eurostat publication, “Taxation trends in the European Union – Data for the EU Member States, Iceland and Norway”.

http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/t ax_structures/2014/report.pdf

The country chapter on Malta needs to be read in conjunction with Tables 72 and 73, on pages 245 and 246, to get the whole picture. Table 72 shows the environmental taxes as a percentage of GDP in the case of transport, excluding fuel; in Malta, car owners pay the second highest rate. In this case, Denmark is the only EU country where they pay more – 1.4% rather than Malta’s 1.3% of GDP.

But when these transport taxes are calculated as a percentage of total taxation, it shows that Maltese car owners contribute 3.8% of total taxation, when the EU-28 average is only 1.3%. This Table shows that in 2012, as in previous years, Malta ranked first among the 28 member States of the European Union. There are EU countries like Estonia and Lithuania, where transport taxes are only 0.2% of total taxation.

770+ signatures

This is the reason why the Malta Automobile Club launched its petition to reduce vehicle taxation in Malta. So far, more than 770 people have signed the petition, and this new publication is expected to encourage more car owners to sign the petition.

http://www.change.org/petitions/hon-minister-for-transportmr-joe-mizzi-and-hon-minister-for -finance-prof-edward-scicluna-reduce-vehicle-taxation

There is no reason why car owners in Malta should be singled out to pay a heavier tax burden than necessary than other tax payers. Since the government has now identified a new source of revenue through the Individual Investment Programme, the vehicle registration tax and the annual circulation licence tax can be lowered gradually over a number of years.

Traffic congestion and air pollution should not be used as an excuse to keep vehicle taxation in Malta as the highest in the EU, as a percentage of total taxation. Proper traffic management can take care of traffic congestion, while serious emissions tests could take care of air pollution.

Car owners include young people, whose parents are likely to be supporting them, as well as senior citizens and pensioners. Lip service to the needs of these two categories of Maltese citizens ought to be translated into real tax relief.

Those who thought that EU accession was going to be of benefit to Malta when it comes to vehicle taxation have been proved wrong over the past 10 years. The Malta Automobile Club hopes the government will take the appropriate steps in the coming Budget to rem- edy this anomaly and move Malta away from the top of the table.

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