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Matthew Vella
Whilst the European Commission is taking the UK government to court over disproportionate penalties on consumers bringing cheap alcohol and cigarettes back from France, Maltese consumers are facing similar debacles at customs points when arriving from Sicily and Italy with stocks of cut-price booze.
With large amount of alcohol confiscated by customs officials, Maltese consumers are coming to terms with the ‘idiosyncrasies’ of the so-called European Union’s free market. Under EU law, shoppers can buy any amount of drink and cigarettes abroad, which is already inclusive of excise duty, and bring it back to Malta without paying Maltese excise duties, as long as it is for private consumption.
Maltese consumers are perplexed by the demands for excise tax to be paid on alcohol and cigarettes purchased from abroad. It is common for consumers travelling to nearby countries such as Italy, and notably Sicily, to purchase cheap alcohol for upcoming wedding celebrations.
However, some consumers are questioning why they are made to pay excise on alcohol they bring back from other EU countries. On the other hand importers argue that excise duty on alcohol is not harmonised in the European Union and Maltese Customs should be more vigilant and pro-active in stopping the importation even in small amounts of alcohol.
On the other hand Maltese importers are in favour of reducing the excise duty. This in their view would lead to less ‘contraband’ in alcohol and in the long run more revenue for the treasury and their coffers.
The incentives for travelling to Sicily on a ‘booze cruise’ are strictly related to lower tax regimes on alcohol. Malta carries the highest rate of taxation on alcohol amongst the new Member States, which is also the sixth highest rate of tax in the EU. Every 100 litres of alcohol carries a tax of EUR 2,322 (Lm1,000) – Lm10 per litre.
The cheapest is Cyprus at EUR 5.99 per litre (Lm2.39), whilst Sweden remains notorious for its highly priced alcohol, carrying a tax rate of EUR 55.19 per litre (Lm22.07).
Italy’s excise tax is EUR 7.31 per litre, (Lm3.13), a good enough reason for Maltese consumers to bring back substantial volumes of alcohol from Sicily.
Another confirmation of Maltese consumers preferring to buy their alcohol through their own channels are the figures of decreasing volumes of alcohol entering Malta every year, most notably whisky and bourbons.
Between 1999 and 2003, imports of whisky decreased by 13.5 per cent, a total reduction of 98,956 litres from 1999.
In the UK, the treasury has said it is losing GBP 3 billion in lost excise duty revenue because of consumers crossing the English channel over to France, which has a much lower tax rate on alcohol and spirits. The same can be said for the Maltese treasury.
matthew@newsworksltd.com
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