In my letter “Car registration tax” (TMID, 13 February), I had highlighted that I expected that the government’s response to reforming the discriminatory car registration tax would be slow and result in a fudged approach. For once, the government has fully met my expectations, because with the recent announcements on the car registration tax reform, the government clearly intends to take the EU, the Commission and Maltese consumers for a ride (and still an expensive one at that if you apply the new car registration approach).

The essence of what the government is proposing changes very little. If you apply the formulas they are suggesting, the cost of anybody bringing a car into Malta from another EU country is still shocking and would still mean Malta has among the highest registration taxes for most vehicles. It is true that for some vehicles the costs are reduced, but the reduction still implies that Maltese consumers cannot yet enjoy the same rights and privileges as most of their other European counterparts. When it comes to the right of mobility, as well as movement of goods, Maltese consumers continue to be treated as second rate citizens by their own government.

The proposed registration values (RV) and subsequent multiples imply that the cost of vehicles is still based on vehicle values in Malta. Thus, for example, importing an “environmentally friendly” compact car (less than five years old) from the UK, which may cost e3,000, will be based on an RV (registration value) of equivalent car in Malta, which could cost a minimum of e8,000. This implies that car registration could still cost the consumer more than the ‘real’ value of the car.

As a consequence, the new registration tax does not stimulate competition, value and choice for consumers. It leaves little incentive (one granted to other EU citizens in other countries) to purchase cheaper vehicles in other parts of the EU, as these are revalued on local market valuations and implicitly end up costing more than local alternatives. By not allowing cost value in country of origin (i.e. real cost of vehicle) to determine the RV and dictate that RV is determined by the skewed dynamics of the current Maltese car market, the government is simply muddling through with another ill-conceived solution to applying EU rules.

The government will surely argue that the new approach will bring prices down, but in reality this is unlikely to happen and if it does it will be at such a slow pace that ensures that government revenues and those of the oligarchs in the car industry (that it seems to want to protect) still cash in for the foreseeable future, well at least until the next election, by when it could stop being their problem.

I still have faith that EU institutions will continue to push the Maltese government to appropriately honour its obligations towards its citizens and the EU itself. The EU was not forced onto the government; it (rightly so) pursued membership to the club. It is now about time it started playing by the rules (it has surely had plenty of time to plan for them), so its people can truly benefit from being EU citizens.

Mario Mifsud

Surrey

UK