There are all the signs that both the retail sector and the producers and consumer sectors are now beginning to realise what will hit them with this new tax and the initially slow reactions are now racheting up.

GRTU has given the government time until Tuesday when it will meet to decide what to do.

It is claiming this new Bill has not been preceded by what the government had promised as late as last year: that a social impact assessment or business impact assessment be carried out before the introduction of a new measure.

The General Workers Union, which yesterday claimed on

l-orizzont that the government was bringing in this Bill ‘arbitrarily’ and without consulting the trade unions, will be convening its national council on Tuesday afternoon to discuss the situation.

The union said it was to be expected that this Bill and tax will have a negative impact on workers and their families. This, it added, seems to be a pattern where government is involved: of taking decisions which pile on more burdens on workers and pensioners and which continue to diminish the purchasing power of salaries and pensions.

Observers of the local scene, who have been speculating that the new Lawrence Gonzi government is a carbon copy of the Alfred Sant government of 1997, are now claiming this new tax will face the same music faced by Dr Sant in 1997 with the notorious water and electricity rates hikes.

Speaking to The Malta Independent on Sunday yesterday, GRTU Director General Vince Farrugia said this new tax has been introduced in a haphazard manner. With Malta now part of the EU internal market, many of the items for sale would have paid an eco-tax at the point of production. It does not need to be paid again at point of consumption, he argued. This will add another layer of taxation, over and above the recent VAT increase.

Apart from GRTU, Friends of the Earth and the FOI have also commented on the new bill.

(See page 4).

He also claimed that whoever drafted this Bill does not know how the EU’s waste policy works. This includes an element of positive and negative discrimination, he added, which is signally absent from this Bill. On the contrary, the local tax will be at a fixed rate, regardless of the people it will affect. Also, whether there is any, ecologically, a more sensitive alternative for the goods being purchased

Thirdly, traders are being asked to do a stocktaking. He asked: Why is this? Traders have already paid taxes on the existing stocks. Mr Farrugia claimed that this stocktaking could mean that those who stocked up on their goods in preparation for the Trade Fair, and who did not do well, will now be clobbered with the eco-tax. So those who did not do well at the Trade Fair, Mr Farrugia argued, will now be punished twice over.

For the past four days GRTU has been trying to find out which government department will be responsible for the Bill or will be implementing it. It has so far found no-one. The VAT office says it will not handle it. Customs argue that if it tries to handle this, it would be in breach of the EU law.

Furthermore, Mr Farrugia charged, this Bill did not come about as a result of consultation with public or private sector bodies or even with environmentalists. Mr Farrugia added that GRTU has been a member of the EU’s Eco Council for a number of years but it was not consulted on this Bill. Other constituted bodies as well are part of wider EU bodies but the government, he claimed, acted on its own and consulted nobody.

This new tax will continue to increase the burden on retailers of enforcing the tax and collecting money on behalf of the government when they are already burdened with numerous other responsibilities.

While the government, he claimed, has said it will be getting some Lm4 million from this new tax, it is still ready to fork out Lm9 million for the Brussels embassy.

And when VAT was raised from 15 per cent to 18, the social partners were assured that raising VAT would be the only tax increase. This Bill is in breach of the agreement that there would be no more tax hikes apart from the VAT increase.

This new tax comes at a time, he argued, when traders are receiving income tax bills dating back to the 1970s. Even if the money being demanded is relatively small, it is an additional tax, nevertheless.

Water bottles and cans for non-alcoholic beverages will carry a 1c tariff per item while containers of alcoholic beverages will have a 5c tariff. The same applies to toiletries and cosmetics, Prime Minister Lawrence Gonzi and Minister George Pullicino announced last week.

Tyres for motor and commercial vehicles will have a Lm2 tariff while batteries will carry a 10c per battery rate. Accumulators such as car batteries will have a 70c eco-tax.

Cooling and refrigerating equipment carries a Lm12 tariff, Lm3 is payable on water heaters while television sets and monitors bigger than 28 inches will have a Lm15 tariff. The smaller sets and monitors carry a Lm5 tariff. Cookers and appliances used for washing will have a Lm10 charge. A Lm2.50 tax will be charged on telecommunications equipment.

Asked by The Malta Independent daily whether the government had forecasts of the tax-generated funds, Mr Pullicino mentioned that it is estimated that it would reach Lm4 million per year. The figure coincides approximately with the expenditure for Wasteserv, the company responsible for waste management.

A waste collection scheme is also being planned. The scheme will enable importers or producers whose items are being disposed of to cut on their eco-tax by implementing a collection scheme.

Dr Gonzi said that in this way the private sector can give its contribution waste management and use the collection scheme as a competitive incentive for customers at the same time. A firm selling white goods, for example, can give customers refunds for their old fridge when buying the new one, because they themselves would save from their eco-tax contribution.

The scheme was discussed with a number of industry representatives from the bottling sector earlier this year, Dr Gonzi said. No conclusive scheme was arrived at so the government is now working on its own proposals. The system will give the private sector room for participation at different levels, he said.

The tax will be collected through the VAT department from private enterprises. It was decided to have the tax collected in this way so as not to burden entrepreneurs with new bureaucratic procedures, Mr Fenech explained. All they have to do is add a declaration of the items sold and the respective eco-tax due to their VAT return, making use of the same self-assessment system.

Mr Fenech also pointed out that taxation at point of entry was also avoided so as not to revert to customs procedures similar to those before 1 May.

The Bill is expected to be discussed and passed before the summer recess, Dr Gonzi said, especially because a commission set up to evaluate its effects on the economy should present its report by October.

The set up of the commission was announced on Monday following a meeting the Rural Affairs and Environment Ministry had with the GRTU. In this connection, the government announced that the commission will include representatives from the GRTU, the Federation of Industry and the Chamber of Commerce as well as government representatives.