The Malta Independent 30 March 2023, Thursday
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TMID Editorial: No new taxes?

Saturday, 21 January 2023, 09:31 Last update: about 3 months ago

The Labour government has boasted for a number of years and in a succession of Budgets that no new taxes have been introduced, or that existing taxes have not been increased.

This was the case from Joseph Muscat’s premiership to the present day, despite the economic pressures put by the Covid-19 pandemic and by Russia’s invasion of Ukraine. 

In each Budget, one of the leading points for the Labour government was that no additional burdens would be put on the people and no new taxes would be introduced.

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Indeed – at least outwardly – no new taxes were in fact introduced, and no existing taxes were announced to have increased.

But behind the scenes of this promise, is it true that certain expenses for the people have not increased?

Just this week, The Malta Independent reported that the cost of a VRT for a car has risen by €5, meaning that the test now costs €30.27, rather than the €25.27 that used to be charged until last year.

Drivers were told that this increase in charge was agreed by all VRT stations and makes up for the increase in costs for carrying out a service. No public announcement has been made on the increase in the cost of a VRT test.

VRT testing is an obligation for drivers after the car has been on the road for five years, and every two years from then onwards. If the car does not pass the test, no insurance cover or licence will be issued unless the necessary alterations or repairs bare carried out.

This means that this is in essence a mandatory cost if one wishes to drive a car. The only way to avoid it is to simply stop driving… perhaps not a bad idea given how Malta has effectively become a moving car park, but we digress.

The government may not have announced any new taxes in the Budget, but indirect taxes on the people have increased.

An indirect tax can be defined as a tax or service charge imposed by one part of the supply chain – say the manufacturer or retailer – which is then passed down onto the consumer in the form of an increase in price to make up for it.

For instance, as from 1 January new increased gate fees for the disposal of bulky weight were introduced by WasteServ. This is a prime example of an indirect tax: the cost will be shouldered by the businesses paying these tariffs, but their own prices will be adjusted in order to reflect the new tariffs, meaning that the consumer will have to pay more.

In this sense, the public – perhaps while not recognising it as much – is still paying more. 

The fact that things such as the increase in the cost of VRT testing for instance can go under the radar until the media realises it and reports it shows just this. 

It’s a pity that politics is such that the party in power needs to play games of hide and seek with their actual policy in an attempt to take people for a ride.  It’s even more a pity that it seems like the majority of people fall for them.

 

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