Does Malta's pricey car registration tax need revisiting?

30th May 2016

The association of car importers Malta (ACIM) believes that the registration tax on imported cars needs to be reduced, to bring it in line with the rest of the EU.

In a recent interview with the Times of Malta, ACIM Chairman Joseph Gasan affirmed that, “our members will continue to do their utmost to ensure that retail prices of new motor vehicles become closer to those of our European counterparts. This, however, can only be attained by revising the registration tax,” in response to comments made by customers that new cars in Malta were more expensive than in Europe.

Mr Gasan added that it is common knowledge that Malta’s “complicated tax regime” tied importers’ hands, in so doing, forcing prices up.

Presently, registration tax is applicable to every new vehicle imported to Malta, and is calculated using a formula which takes emission levels, the vehicle’s size and the VAT paid into account. According to European Commission figures, it was recently revealed that Malta’s vehicle taxation rate, on average, is the highest in the EU.

Meanwhile, EU figures dating back to 2013 showed that car prices had remained stable in Malta, despite dropping in 24 other EU countries, with the EU price index for cars revealing that while the EU average had dropped by 2.5 per cent, it had remained almost the same in Malta.

Speaking to the Times of Malta, Mr Gasan maintained that ACIM has petitioned different administrations, including the current one over the years, to revise the tax regime.

The association is also currently working with Government to introduce a new scrappage scheme, which Mr Gasan said he is hopeful will incentivise customers to buy new vehicles, adding that such incentives should become a permanent feature as they help the country on a number of levels.

Interestingly, according to the Times of Malta, 21,260 cars were registered in Malta in 2015, of which only 9,321 were new.


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