Malta ranks first among the European Union 27 member states when it comes to transport taxes, excluding fuel, as a percentage of total taxation.

http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/tax_structures/2013/report.pdf

This has been confirmed by the latest Eurostat Statistical Book “Taxation trends in the European Union – Data for the EU Member States, Iceland and Norway, 2013”, and in particular Table 73 in Annex A on page 244.

“Transport taxes (excl. fuel) mainly include taxes related to the ownership and use of motor vehicles. … The transport taxes may be ‘one-off’ taxes related to imports or sales of the equipment or recurrent taxes such as an annual road tax.”

This is explained in Section D: Environmental Taxes of Annex B: Methodology and explanatory notes of the same publication on page 278. Taxes on petrol, diesel and other transport fuels are not included under transport taxes, but are included under energy taxes.

It is clear that the trend in Malta on high taxation on vehicles – both registration tax (RT) and annual circulation tax (ACT) – as a percentage of total taxation reported by the European Commission for the period 1999 to 2002 continued until 2011, as reported in this 2013 publication. Although these taxes have gone down as a percentage of total taxation, they are still the highest in the EU.

This unenviable situation in Malta is highlighted in the content of this publication. “… in some countries the contribution of taxes on vehicles is significant: for instance, in Denmark, Ireland, and Malta they account for between 35 per cent and 44 per cent of environmental taxes.” (page 41).

Malta

This conclusion by the European Commission is further elaborated in the section on Malta in the following terms: “Environmental taxes are relatively high (Malta 3.2 per cent of GDP, EU-27 2.4 per cent of GDP). The high level of environmental tax revenue is attributable to taxation on transport (1.4 per cent of GDP, EU-27 0.5 per cent)” (page 117). In other words, transport tax in Malta as a percentage of the Gross Domestic Product is three times as much as the EU average!

The Commission did not fail to notice that, “From 2011, … All motor vehicles, both commercial and private, with Euro 1 to 3 emissions (or worse) registered an increase in registration tax.” (page 119).

Car users in Malta do not really need the EU to tell them how heavily taxed they have been over the past several years. A look at the Budget 2013 clearly shows that car users in Malta are contributing a heavy price and are getting very little in return. 

Government revenue from driving licences, motor vehicle registration tax, and annual circulation fees amounts to €98.1 million (items 0206, 0242 and 0255, Vote 18 Financial Estimates 2013).

Government expenditure on road construction and improvements amounts to only €7.0 million (item 7205, Capital Expenditure).

The €15.1 million voted to Transport Malta for roads come from EU Structural Funds 2007-2013 (item 7211 iv) and from the EU Cohesion Fund 2007-2013 (item 7212 ii). 

So what is happening to the other €91.1 million collected from car users? The Malta Automobile Club is addressing these issues.

https://www.facebook.com/pages/Malta-Automobile-Club/484683321570286?fref=ts?fref=ts

Alfred A. Farrugia

The Malta Automobile Club