The ombudsman recommended that government scraps licence fees for satellite receiver dishes as this is in direct conflict with European Union legislation.

Joe Sammut said the crux of the argument was that EU legislation overrides national legislation and imposition of such a licence fee, or any subsequent fine, would probably earn the government a warning from the European Commission.

The complaint

The Ombudsman received a number of complaints from owners of satellite dishes regarding the insistence of the Department of Wireless Telegraphy for the payment of the annual licence for their satellite dish. Complainants argue that the existing legislation in Malta breaches one of the four basic freedoms of the European Union.

Since EU legislation prevails over legislation of member states in a case of conflict, complainants said the tax imposed is illegal besides being discriminatory. Complainants also referred to the threats from the department of an additional fine if the licence is not paid in time.

Facts and findings

In terms of the Wireless Telegraphy Ordinance – a licence is required to keep a Wireless Telegraphy apparatus for the reception of Satellite TV broadcasts (TVRO). The licence fee is Lm25 and the licence has to be renewed annually. If the licence is not renewed, an additional fine is payable.

On 1 May 2004, Malta joined the EU and in general, Maltese legislation has to be compliant with EU legislation. In terms of Article 49 of the EC Treaty, restriction of freedom to provide services in respect of nationals of member states within the community is prohibited.

In support of their allegations, complainants cited an FAQ (Frequently Asked Questions) leaflet on satellite dishes issued by the Malta EU Information Centre and a Communication from the EU Commission, which considers that the tax on satellite dishes is not permitted under EU law.

The European Commission adopted a Communication, which stated that private individuals should be free to use satellite dishes without undue technical, administrative, urban planning or tax obstacles. This right emanates from the principle of free movement of goods and services, which are two of the fundamental Internal Market freedoms.

The Commission declared that given the cross-border nature of the services carried by satellite including radio and TV broadcasts, use of satellite dishes as receivers have direct and indirect repercussions for various economic players, namely the users, satellite dish technicians, operators, broadcasters, providers of information society services, advertisers, content providers, manufacturers and distributors.

Any restriction on the use of satellite dishes has an impact not only on the end user but also on the large number of intermediate financial operators.

Private individuals can cite the free movement of goods and services as a fundamental principle which must be directly applied in national law.

Moreover, the Commission argued that a tax collected under country law in violation of a fundamental freedom could render the member state liable to investigation by the Commission.

The Communication from the Commission also refers to satellite dishes in the context of freedom of expression.

In March 2000 the EU Commission announced that it had again warned Belgium over taxes on satellite dishes, and requested the Belgian government to ensure the immediate and definite repeal throughout the country of all taxes levied on satellite dishes as well as to refund the taxes already paid. The Commission had considered these taxes as a disincentive to receiving satellite broadcasts from other member states and discriminatory because it affects, in particular, certain categories of viewers as against cable operators whose users are not subject to tax.

The Malta-EU Information Centre, in the light of the Commission’s Communication on satellite dishes, had, in one of its replies on specific issues, expressed the view that most probably the licence fee requirement on satellite dishes would have to be removed after Malta joins the EU.

The Department of Wireless Telegraphy defended its position by stating that as long as there are no amendments to the law, it must abide by current legislation. At least one of the complainants has applied for redress to the European Commission and the latter is looking into the matter.

Consideration and comments

This is the first case since Malta became an EU Member State, where a local law is being challenged as being incompatible with EU legislation and is therefore

no longer enforceable. The Commission will decide on the matter, but in line with its policy and practice, it invited him to seek redress at the same time from the national administrative or regional authorities (including the national Ombudsman). In simple words the EU Commission is of the opinion that the relative provision/s of the Wireless Telegraphy Ordinance could no longer be applied as from 1 May 2004 when Malta joined the EU.

The Commission, besides indicating that in such cases, tax collected contrary to EU legislation has to be refunded, has also indicated that the member state concerned could be liable. Within this interpretation, the Commission has repeatedly warned one member state to ensure that all taxes specifically directed at satellite dishes be removed.

The Department of Wireless Telegraphy, no doubt following advice from a higher authority within government, argues that it is bound by existing legislation which requires it to collect the licence fees every year as well as the relative (additional) fines if the fee is not paid within the prescribed time. Based on the EU Commission’s opinion, even such administrative act on the part of the Department would be in breach of Malta’s commitment to ensure primacy of EU legislation over national legislation.

The Commission’s position is, however, a clear message to governments and is likely to influence its decision on Malta’s case when it decides on the petition submitted by one of the complainants. Moreover, its warnings to the Belgian Government establish a precedent which the Malta Government should take note of. On its part, the Department of Wireless Telegraphy has not brought one single argument to counteract those made by the Commission.

The notion, unofficially being muted that there is no specific EU directive on taxation of a satellite dish, and therefore that local legislation is not in conflict with EU law, ignores the fact that Malta has committed itself to respect the fundamental freedoms within the EU, including those of free movements of goods and services.

Conclusion and

recommendation

On the basis of the above considerations, the ombudsman’s conclusion is that whatever the motive behind the authorities’ decision to retain the licence fee on satellite dishes and to insist on its payment as well as on the imposition of a fine in case of non-payment in time, was an attitude in conflict with the EU Commission’s decision on the matter. Mr Sammut said government was risking a warning from the European Commission. Moreover, in all probability Government will be required to refund the revenue collected from licences since May 2004, he said.

The ombudsman recommended that Government reconsidered its position in the light of the above findings.