The European Commission has decided to proceed with its case in the European Court of Justice in Luxembourg about Malta’s Departure Tax, after freezing the case six months ago to give time for the Maltese authorities to remove the tax.
A spokesperson for the Commission told MaltaToday: “Yes, the Commission decided to lift the suspension on the referral to the European Court of Justice. In other words, it decided to proceed with the case against Malta.”
The decision, which was taken during last Thursday’s Commission meeting, came a few days after Finance and Investments Minister Tonio Fenech had told The Sunday Times that the Departure Tax was going to be removed as from next November.
Asked why the Commission had taken this decision, the spokesperson said curtly: “Simply because Malta has not informed the Commission of the adoption of measures to change the departure tax (in the Commission's view discriminatory) which originally led to the Commission launching the infringement procedure.”
“We have no further comments on the case, which will now go before the European Court of Justice – unless of course the necessary steps to rectify the situation are taken by the Maltese authorities in the coming days,” the Commission spokesperson added.
On 27 June 2007, the Commission had taken a decision to take the case before the European Court of Justice in Luxembourg for violation of the EU Treaty.
However, in November 2007 the Commission decided to freeze this decision “because the Maltese authorities claimed that the new legislation would be imminent,” a Commission spokesperson told sister paper Business Today last Wednesday.
In fact, in last year’s Budget Speech, the Government reduced the Departure Tax by half.
Earlier, the Commission had send a letter of formal notice to the Maltese authorities (the first stage of the proceedings) on 4 July 2006, followed by a motivated opinion on 15 December 2006 (the second stage) after the Commission did not deem their response about the matter as satisfactory.
Commission sources told MaltaToday that after the Maltese Government did not keep its original promise to remove the departure tax, which had led to the initial suspension of the court proceedings, the Commission was considering the word of the Maltese Government as good enough and would only stop the proceedings only when the Departure Tax is actually removed on the ground.
Speaking to Business Today, Fenech defended the Nationalist Government’s decision to remove the Departure Tax as from November and not earlier.
“The electoral promise by the Nationalist Party was to remove the tax during the new legislature – something which it is actually doing in the first few months.
“There are a number of reasons why this cannot be done before once is the need to go to Parliament and this takes at least a month, also the tax change is being made in the period new offers and prices for the season come into place without complicating the situation for operators in the sector.
“Also, the change is being done within the annual parameters of the normal budget process,” a Ministry spokesperson contended.
Asked whether the Maltese government had informed the European Commission about its decision or not, the Ministry spokesperson said: “The European Commission has been formally notified of our intentions.”
However, asked about the matter, a spokesperson for the European Commission told Business Today: “So far, the European Commission has not received from the Maltese authorities formal notification of adoption of any new legislation on this issue.”

czahra@mediatoday.com.mt