Speaking to members of the Chamber of Small and Medium Enterprises (GRTU), Mr Fenech said it was time for everyone to stop paying lip-service towards the environment and start acting. He said that since it is the government alone that is dealing with waste management, the financial burden cannot be carried solely by the government.

Mr Fenech said that before introducing eco-tax, the government carried out a lot of research and the law that is to be implemented on 1 August will be an Enabling Act. It may therefore be amended.

He said that the tax would only affect manufacturers and importers, noting that if an imported product is re-used, the eco-tax is only charged once. This means that importers or producers would have to add the eco-tax to the base cost of their goods.

He explained that it would have been much easier for the government to introduce an eco-tax in the form of a poll-tax, whereby families would be taxed according to the number of members.

“However”, he said, “this would not have been just, since an eco-tax should be based on the ‘polluter pays’ principle.”

Mr Fenech also said that an eco-tax promotes the sale of more environment-friendly goods, citing rechargeable batteries as an example.

The system being introduced in Malta targets various goods and their pollution potential. However, he reminded those present that even though some goods may be more eco-friendly than others, they still have to be disposed of.

But the most important issue of all seemed to be based on how the government was going to impose the tax on stocks. The Act calls on enterprises that fall under the eco-taxation category to carry out a stock-take as at 1 August.

Mr Fenech said this was important so that companies that did not stock large amounts of goods would not be penalised when compared to those who have large stocks and who could therefore sell goods without the eco-tax, and therefore, at lower prices.

Mr Fenech was met with a roar of disapproval when he said that there was a good possibility that if government exempted existing stock from the tax, goods could still be sold with the eco-tax imposed, thus ending up in the sellers' coffers.

GRTU director Vince Farrugia said that the chamber had called on the ministry to either explain how the proposed eco-tax would be collected or else postpone the imposition of the tax.

Mr Farrugia said that the government was introducing a new tax without agreement having been reached between the parties. This state-of-affairs, whereby the government ignores the views of constituted bodies, cannot be accepted.

Although the GRTU is in favour of an eco-tax, this should not be implemented before agreement between all concerned has been reached. And it should definitely not target small businesses.

Mr Farrugia said that constituted bodies had made it clear that the level of taxation should not be increased and that the introduction of the eco-tax should be discriminatory, meaning that goods are taxed according to the level of pollution they produce.

Existing tax systems already constitute a heavy burden on small enterprises. In the past, little if any thought had been given to the impact on small business. The sum total of all this is that small businesses in trading and wholesaling, and distributive traders and retailers cannot take on any additional burden.

He said that the GRTU proposed that the government look elsewhere if it is in desperate need of additional revenue to cover the growing expenditure of environmental protection and development. Small businesses have no administrative capacity to handle complicated systems. Regulations will hit regressively on the small business since the owner has neither the expertise nor sufficient resources to handle separate items and procedures.

Time is also limited. As things stand, the onus of complying with VAT, PAYE, social security contributions, sick and parental leave, bonus, employment contracts, recurring charges, the new data protection regulation and endless bureaucratic requirements is increasingly pressing on the productive potential of private initiative. He said that this is contrary to the spirit inherent in the European Charter for Small Businesses to which the government is an endorsee.

It is for this reason that the GRTU argues against the imposition of an eco-tax that will have to be managed by traders and would add additional costs to a sector which is becoming increasingly uncompetitive. He added that the GRTU definitely objects to any eco-tax requesting retailers to be the tax collectors.

Mr Farrugia also said that the imposition of eco-tax as a fixed amount rather than as a percentage penalises lower-wage earners.

Responding to Mr Farrugia, Mr Fenech said that the eco-tax was mentioned in the budget together with the sum of money that the government was expecting to gather from it this year – Lm2.5m.

Answering questions from the floor, Mr Fenech said that companies may get together to manage waste and therefore be exempted from the tax. An entrepreneur who claimed to sell white goods said that the company collects such for disposal without charging clients, pointing out that such goods never ended up at Maghtab since they were handed over to scrap yards against a very small sum of money.

In reply, Mr Fenech said that in such cases, the entrepreneurs should get together and draw up a Formalised Collection Scheme and discuss its implementation with the government.

And here Mr Farrugia’s first and only interruption came, with an interrogative remark: “What consultation?”