Labour to raise VAT refund on cars with European Commission
The Malta Labour Party is expected to appeal to the European Commission in its campaign for people who paid VAT on the vehicle registration tax to get their money back.
Labour leader Joseph Muscat told Parliament on Monday that government was duty bound to refund “this illegal tax” that was imposed since Malta’s EU membership in May 2004.
“I say that if government wants to show how consumers can benefit from EU membership, it should give back this illegal tax that it was imposing in breach of European regulations,” Muscat said.
“If it doesn’t do this out of its own free will, the Labour Party is ready to take the initiative itself on behalf of these consumers to take back what was taken from them by this government.”
Finance Minister Tonio Fenech has already made it clear government will not give any refunds despite the European Commission’s ruling that the tax was illegal.
Contacted yesterday, Muscat did not rule out making the case with the European Commission but said he will be announcing details of the campaign “in the coming weeks”.
“I hope we won’t have to resort to telling the EU about the government’s illegal tax,” Muscat said.
“Government should have the decency to refund the millions siphoned from car buyers. Since government has accepted this tax was illegal, it's only fair the funds taken illegally from car buyers get refunded.”
Pressed with the government’s insistence that it will not give any refunds, Muscat said he would be announcing details at a later stage.
“There was a similar case when government gave refunds to those who had paid registration on satellite dishes. The principle is the same.”
VAT on vehicle registration tax is considered as a double taxation from which government earned up to €10 million every year. The 18% extra will be scrapped from 1 January 2009, and vehicles will be subjected to a new registration tax and annual circulation tax regime.
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