The government’s negligence led it to take a decision which will adversely affect inflation, increasing the financial burden on Maltese businesses and families, the Nationalist Party said in a statement.

The government last year signed in favour of an EU directive which will see a tax on emissions from cargo ships that will see transportation costs rise and, as a result, an increase in prices of products imported to Malta.

While the PN is all for the protection of the environment, the government lack of vision while the directive was being discussed at EU level means that Maltese consumers will be facing an added tax that will increase their expenditure.

The EU ETS Directive on Shipping obliges ships to surrender so-called EUAs (Emission Unit Allowances) to compensate for the carbon they generate while under sail.

The system, which is already in place for the aviation sector, forming part of a wider package, is known as Fit for 55. This is a European initiative which targets EU greenhouse emissions reduction by 55% by end of 2030.

The PN said that it will continue to protect businesses and all stakeholders. It also asked the government to come up with realistic solutions and contingency plans if negotiations to remove the emissions tax, to be introduced in January, fail.

The PN said that the Malta Freeport Terminal will be negatively affected as ships will be seeking different ports of call to avoid paying the tax. The Freeport contributes 2% of Malta’s GDP and can have a business leakage of €138.8 million a year while losing 1,700 cargo ships per year.

The PN also pointed out that Malta may lose up to 165 connections with other world ports, which will mean that the country will also lose its competitive edge.

An additional €7.50 per metre expense on trailers and containers will lead to an added expenditure of €10.8 million on consumers, the PN said.

In its budget presentation, the government did not mention any plans to counter all this, the PN said.

Contrary to this, the PN said it proposed that the Cost of Living Adjustment is not taxed, that the government gives tax credits to employers so as not to force them to increase prices as a result of the COLA adjustment, create a national fund to assist importing/exporting industry and create a new economic model that supports value-added business.

In reply, the Labour Party said that the PN once again had chosen to play the political game rather than safeguard the country’s interests.

The PL said the PN speaks of the directive as “key legislation” in Brussels, whereas in Malta it attacks the government for the position it took.