Following last week’s article ‘Chamber of Commerce claims abuse in the free movement of goods’’, The Malta Business Weekly contacted a number of people with top posts in the sector and asked them their opinion on this matter.

Here are the responses the paper received.

Norman Aquilina

Below is my comment - in response to your request - which is being given in my capacity as Farsons CEO  (and not as a Chamber Council member).

Having followed what has been reported in the media, I believe we need to place things in a clearer perspective and keep focused on the bigger picture, otherwise we risk derailing, or even worse, misleading the public to very wrongly think that we are talking about some form of ‘dispute’ between the Chamber and a private entity.  

Clearly, the issue at hand is of a general economic and market operational nature, because it is not so much about how goods arrive in Malta but more about how goods are sold within the market. It is about the need for Government and the relevant authorities to ensure that a fair and level playing field prevails across-the-board, within all businesses. This is equally of interest to both the business community and general consuming public as a whole, apart from its impact on Government coffers.

We must all accept that even just the thought of protectionist policies and procedures are at best, remnants of the past, and today we have all become accustomed to operating in a liberalised and competitive environment.

That in essence is a good thing, however, this is subject to the market being fairly regulated and enforced in an equitable manner. No one should aspire to see any form of over- or under-regulation within any form of economic activity – if anything, we should all stand for minimal administrative bureaucracy, in other words - better regulation - but we should all expect to operate within a fair competitive environment in which fiscal and regulatory compliance is equitably applied, and enforced.

We certainly should not render fiscal evasion and the non-compliance of our regulatory obligations as a means of achieving some form of unfair competitive advantage. It is for this reason that there is merit in calling on Government and the relevant authorities to bring on adequate and properly functioning market surveillance.

Furthermore, with fiscal policy shifting more towards indirect forms of taxation, as seen in the Government’s November 2013 budget – which resulted in a reduction in income tax but increase in excise tax - the issue of market surveillance is increasingly becoming important.”

Simon Mifsud

(SMS Shipping)

I refer to your email wherein you have requested my opinion as to the state of play with imports from Sicily.

I do not feel qualified to comment on the following issues:

a.       The agreement between VGT and Virtu since this is a private agreement between the parties

b.      The lack of statistical data being provided to Government entities due to lack of manifests

c.       The fact that there is rampant avoidance of dues where spirits and other items attracting eco contribution is concerned

d.      The separation of goods as required by law

e.      The impact on the freedom of movement of goods on this area by LN 82 of 2003

Having said the above the law clearly states:

“No person shall unload a groupage consignment except at such place and during such time as shall be established by the Commissioner”

A groupage consignment is defined as: “a consolidated consignment of goods carried on any trailer, heavy commercial vehicle or any other commercial vehicle loaded with a container and destined for more than one consignee”

 It is interesting to note that this law applies even if one has one ton of goods. The often mentioned 10 tons is only used to define a heavy commercial vehicle – which can carry over 10 tons.

As a company we have refused to represent any operator who does not abide by the above regulations. The place which has been designated by the Commissioner is the Hal Far Depot. As a company it costs us a great deal of money to operate a warehouse within these premises. The expenses include all racking, palletisers, forklifts, computer systems, staff, insurance etc. Clearly man power is also needed to input all manifests and issue all customs/delivery documentation. This procedure also means that the goods are handled twice, once at Hal Far and again to deliver to the receiver. We go through this expense in order to be fully compliant with the law.

Regrettably the police do not (and possibly are not in a position to) enforce this law. This means that a cubic metre of goods landed by way of Hal Far will perforce mean added costs as compared with a rogue transporter who flouts the law and delivers the goods to the door of the receiver without going through the proper procedures.

The penalty for failure to abide by the regulation (if indeed any person is caught doing so) is a minimal traffic fine and as such there is not even an element of a deterrent in the law which would make such transporters think twice before breaking the law.

This situation is of course creating a very uneven playing field within the industry and one which is leading to unnecessary difficulties at Hal Far. If a private person wants to import something from Sicily he can either go to a bone fide operator who will go through all the legal procedures and pay X for this service or go to a transporter who is prepared to break the law and thus avoid paying the additional X.

 Bone fide companies are being penalised therefore for not breaking the law. It is humbly submitted therefore that either LN 82 of 2003 be amended with heavy penalties and enforcement or indeed repealed.

Joe Bugeja

Malta Motorways of the Sea

Grimaldi Group/Malta Motorways of the Sea Ltd are currently discussing the matter with the relevant authorities.  In this respect, we prefer that at this stage we avoid going to the press directly.

Martin Galea

Joinwell

It does seem to be a problem. Not so much for us as our main brands are German brands not Italian. However we have had occasions where clients have been approached and told to get a quote - and they would give 20% off our quoted price (which is already normally lower than the recommended retail price). How they achieve this price is difficult to establish as although they do not have showroom costs (at least in Malta), they do have higher transport costs.

However we would wish to ensure that just as Maltese companies have to pay Vat, NI and income tax, and are subject to inspection – that some controls are instituted to ensure that the exchequer either in Malta or Italy is paid.

The single market is based on a level playing field and does not envisage having tax or Vat avoidance.

With respect to items which require installation such as kitchens, the law states that these would require a local Vat invoice if installed in Malta (where to domestic customers).

If this is not happening and the Vat saved is passed on to the customer, this would be to the detriment of the Maltese Exchequer and creates unfair competition with those companies which abide by the law.

This will ultimately encourage local suppliers to evade tax or go out of business – or perhaps to encourage the authorities to maintain a level playing field.