From Dr A. M. Bezzina

Malta was at the bottom of the list of EU countries when considering the percentage of cars purchased with Electronic Stability Control or ESC (TMIS; 20 May – “Malta at bottom of ESC table”). ESC has been shown to save lives and prevent accidents in manoeuvres on slippery roads. ESC has been available in bigger or luxury vehicles for some time and has appeared in smaller, popular vehicles more recently, usually as an optional extra. Budget strapped buyers of smaller vehicles may not appreciate the value of investing in such a safety feature. It all boils down to the total cost of the vehicle and the buyer’s decision.

I was greatly disappointed when I got to know that a new model of a popular passenger car in the super-mini class was launched in the rest of Europe with much acclaim because it was the first car in its class to have ESC fitted as standard across the whole range. On the local market, this car was available with ESC only as an optional extra at Lm300, five per cent of the price of the car. This was without doubt a cost cutting decision deemed necessary for competitive reasons. The salesman even said there is no need for ESC in Malta. “Need” there definitely is, but public demand for it is a different matter altogether. It is ironic that although lip service is given to the need for increasing safety on the roads, 30 per cent to 40 per cent of the price of all safety aids or options in modern passenger cars is in fact tax.

When one considers that the majority of passenger car imports here are small cars, it goes with out saying that only a few hundred vehicles a year enter Malta with ESC. There are probably less than one per cent of all vehicles on the road that have ESC. These low numbers will not have an appreciable effect on reducing road injuries and road fatalities.

While the authorities conjure up a defence (which had to be submitted by 21 May) to counter the infringement proceedings opened by the European Commission as regards car taxation on used car imports, it is very short-sighted of the local authorities if they ignore the obvious solution – encouraging the purchase of safer and cleaner vehicles while mitigating the fiscal incentives given to used car imports from implementation of Article 90 EC. The solution is to drastically reduce the registration tax on new vehicles.

Infringement procedure number 2005/4534 dealing with the minimum registration tax clause in the Maltese registration tax law made the headlines and public knowledge a couple of months ago. A second infringement procedure, number 2006/4256 – which questions the application of VAT on registration tax in general, has never made it to the press nor has it been mentioned by the authorities.

Albert M. Bezzina

MOSTA