Category: Archive – 2004

Il-GRTU tqies li
l-introduzzjoni ta’ din it-taxxa qabel l-ewwel gimgha ta’ Jannar 2005 tkun
ingusta u kiefra kemm ghall-importaturi u retailers kif ukoll ghall-konsumaturi.
Il-GRTU tqies ukoll li jekk din it-taxxa tiddahhal minghajr tnaqqis ekwivalenti
fil-livell ta’ taxxi ezistenti u mill-pizijiet fuq in-negozju din it-taxxa tkun
tfisser telf ta’ impjieg lil mijiet ta’ haddiema. In-negozji milquta ma jifilhux
ghal spejjez aktar u ma jistghux isoffru din it-taxxa gdida bla ma jnaqqsu
l-impjegati.

Il-gvern meta fassal din il-ligi ma kkonsulta ma’ hadd, ma’
studjax l-impatt ekonomiku taghha fuq n-negozji milquta u l-effett
diflazzjonarju fuq l-ekonomija Maltija li hi diga’ fi stat deflazzjonarju u fuq
kollox ma tax zmien lin-negozji milquta biex jippjanaw ghal din it-taxxa. Meta
l-gvern qed jimxi b’dan il-mod il-gvern qed jinjora il-proceduri li suppost
jimplimenta issa li Malta hi membru ta’ l-Unjoni Ewropea. In-norma Ewropea hi
l-process li qed tinssiti fuqha l-GRTU. Bl-Eco-Tax il-gvern qed jgholli l-hajja
u fl-istess waqt icekken l-attivita’ ekonomika.

Il-GRTU tibqa’ ssostni
bl-aktar mod qawwi li l-imposizzjoni tal-Eco-Tax fuq l-istocks ezistenti ghand
in-negozji tkun ingustizzja kbira u jikkostitwixxi precedent ikrah li gvern
x’hin ifettillu jista’ jimponi taxxi godda fuq prodotti ga’ fis-suq. Din hi haga
li qatt ma’ grat qabel. Hu ghalhekk li l-GRTU ma tista’ qatt taccetta
imposizzjoni esagerata bhal din. Jekk it-taxxa tkun imposta fuq l-istocks
il-GRTU tkun kostretta li titlob lil membri japprovaw resoluzzjoni biex taxxa
ingusta hekk imposta huma ma jhallsuhiex u ma jhaddmuhiex.

Il-GRTU qed
tghid car u tond li jekk il-gvern jibqa’ ghaddej bl-imposizzjoni ta’ din
it-taxxa minghajr ftehim mall-imsiehba socjali kollha il-gvern ikun qed jghedded
bis-serjeta’ il-process li ghadu kif nbeda biex Malta titmexxa fuq Patt Socjali
miftiehem. Il-GRTU il-bierah ghaddiet dan il-messagg lil gvern u lill-imsiehba
socjali l-ohra fil-laqgha tal-MCESD li fiha nbeda il-process ghan-negozjati dwar
il-Patt Socjali. Il-GRTU qed issostni li ma jistax ikun li l-gvern jitkellem
dwar Patt Socjali miftiehem imbaghad fl-istess waqt jimponi taxxa gdida li ma
jridha hadd.

The GRTU
concern lies with such action being taken at the peak of the summer season, one
week before the feast of Santa Maria which is the epitome of commercial activity
for the traders, which the Hospitality and Leisure Division
represents.

The action, taken 6 years after the coming into force of the
said Legal Notice will have a substantial, negative impact on the profitability
of the commercial establishments represented by the GRTU, since the beverage
concerned is one of the most popular products sold in the summer months due to
heightened activity by consumers.

Government has
simply messed up this issue and the sooner they admit and move forward to
present something on which we are all in agreement the better. They have an
important point and they should be content with it: we are all convinced of the
need of action on the national waste problem and we are all determined to find
the right solution.

The worst thing they can do now is to unleash the PN
snipers who miss no opportunity to attack the persons, myself in particular, who
have argued most strongly against the nonsense in this Act. It happened before
and we are ready for it.

When these political nitwits have no arguments,
who they go about hitting the persons with accusations of hidden agendas and
political innuendoes. Hopefully this time round the people who really matter
have learned that there is one sure way of achieving success in public
administration, and that is through consultation, serious consultations and not
jokes as happened with the eco-tax.

The GRTU's main arguments are not
difficult to understand. Answers can be found and we can move forward to resolve
other more important issues that are afflicting our country. First of all, this
is not the appropriate time to introduce an additional layer of taxation on
society.

The government is effectively proposing to increase his revenue
so that it can pump more money into inefficient departments and other
authorities. Big government results in institutional sclerosis, a situation
where government departments fail to function efficiently and effectively,
leading to confusion in the same institutional set-up.

Ultimately,
society bears the cost of this improper use of economic resources, including
time and manpower. This is the present situation, exemplified most clearly in
the eco-tax saga.

It is imperative that government ministers understand
the economic situation we are in. An unusually higher RPI (an indicator of
inflation), mainly due to VAT increases, coupled with a stagnated economy
(negative real GDP growth in 2003) is usually referred to as
stagflation.

It seems that inflation is of a cost-push nature, mostly
government induced, which hits the supply-side of the economy directly.
Stagflation simply means that the economy is becoming
uncompetitive.

Increasing the tax burden will suffocate the private
sector that strives for efficiency and ultimately generates value to consumers.
Further taxation acts as a disincentive to work or to employ, possibly resulting
in less tax revenue.

If unemployment increases as a result, government
revenue from income tax, Social Security contributions and VAT will inevitably
decrease. Higher unemployment triggers more unemployment benefits and possibly
underground activities. A search for new tax measures accelerates this negative
vicious cycle.

Employees are put on the alert as a result of this
eco-tax. It is a draconian move but importers are left with no other choice. If
an importer has a restricted credit limit, he will find it difficult to continue
importing the same quantities simply because eco-taxes on those imported items
will fall due in less than three months' time. It is very unlikely that
importers will sell their whole stock within this time period. Eco-taxes are
also due on stocks still unsold. Therefore, should importers limit their trading
business, and then employees will become unnecessary.

As the Trade Fair
survey has shown, people are more conscious than ever of their spending
patterns. Thus, it is not so easy for many importers to pass higher prices onto
consumers. The recent VAT increases have been internalised by many businesses to
limit price movements that render them uncompetitive.

The GRTU is
insisting that government decision-makers take on board several of its
suggestions. It is proposing, among other things, that the Act's coming into
force is postponed until all the necessary discussions and arrangements take
place. Moreover, the tax should become due at the point of sale.

It is
totally unacceptable that the eco-tax has been imposed on the opening stocks.
This creates havoc because businesses cannot cancel decisions taken before the
tax was proposed. It penalises those who ordered and shipped goods without due
notice, and those who didn't manage to sell their stocks.

The GRTU's main
arguments are economic. But we also believe that the Eco-Contribution Act is
socially unjust, especially on young couples furnishing their first home, on the
elderly with fixed and diminishing incomes, and on the workers employed by the
effected traders and producers.

The Act is also unjust as it gives a bad
name to eco-taxes and turns people against solutions to meet our environmental
challenge as they perceive all government initiatives as merely additional tax
burdens.

This Act should be scrapped and reproduced only following
agreement with all stakeholders.

Mr Farrugia is director-general of the
GRTU – Malta Chamber of Small and Medium
Enterprises.

The WEEE and RoHS Directives

Another is the Waste
Electrical and Electronic Equipment (WEEE) Directive which, together with the
related Directive on restrictions on the use of certain hazardous substances in
electrical and electronic equipment (RoHS) was adopted on 13 February 2003.

Another is the Waste Electrical and Electronic Equipment (WEEE)
Directive which, together with the related Directive on restrictions on the use
of certain hazardous substances in electrical and electronic equipment (RoHS)
was adopted on 13 February 2003.

Recognising that many hazardous
substances are used in electrical and electronic equipment (eg lead, cadmium,
mercury, bromine compounds etc), both Directives aim to minimise the impact of
electrical and electronic equipment on the environment during both their working
life and when they enter the waste stream.

The WEEE Directive sets
collection, treatment, recycling and recovery targets for a wide variety of
waste electrical and electronic equipment. Producers of the relevant electrical
and electronic equipment will become responsible for financing most of these
activities although, in the case of commercial electrical and electronic
equipment, they will be able to pass through these costs to the business
user.

The ROHS Directive seeks to restrict the use of various hazardous
substances in new electrical and electronic equipment. From 1 July 2006, the
sale of new products in the EU which contain more than agreed levels of certain
prescribed substances will be banned unless their use falls within one of the
small number of exempted processes where the use of these substances are
permitted until alternatives are found.

Key
Dates

The UK and other EU member states must transpose both the
WEEE and RoHS Directives into national law by 13 August 2004, with various
requirements coming into force in 2004, 2005 and 2006.The UK Government is
currently on track

2. L-operaturi kollha, sidien ta’ negozji, self employed u
haddiema li l-ghixien taghhom jiddependi mis-success fil-qasam tat-turizmu jridu
azzjoni u mhux aktar studji. Matul dawn l-ahhar snin l-MTA infniet fl-istudji,
fl-istrutturi interni u fl-infieq esagerat fuq l-operat intern taghha u ntefqu
somom esagerati f’kunsulenti u fi spejjez amministrattivi. Instaghbu l-iskuzi
kollha biex jiggustifikaw ir-rizultati mhux sodisfacenti ghac-cirkustanzi
ekonomici attwali u hziena li l-ekonomija Maltija qed issoffri minnhom bhalissa.

3. Hu ta’ ghajb li meta din is-sena aktar miljuni ta’ nies fl-Ewropa
kollha saru konxji tal-ezistenza ta’ Malta u tal-potenzjal turistiku ta’
pajjizna bis-sahha tad-dhul ta’ Malta fl-Unjoni Ewropeja fl-1 ta’ Mejju 2004,
l-Awtoritajiet tat-Turizmu flok li nefqu aktar fuq il-bejgh ta’ pajjizna
fl-Ewropa kollha, u ghamlu sforz hafna akbar biex igibu aktar turisti lejn
Malta, qeghdin jinhlew f’studji li jpoggu lin-nies taghhom f’aktar incertezza u
b’inqas entuzjazmu li jahdmu. U ta’ ghajb ukoll li ghadna fis-sitwazzjoni li
l-Ewropej li jridu jigu Malta mhux kollha qed isibu l-mezzi biex jigu
f’pajjizna.

4. Il-gvern irid jara bis-serjeta’ li l-MTA tirnexxi.
Tirnexxi bla hela ta’ aktar hin u rizorsi. Waqt li l-MTA tinfena fl-istudji
n-negozji Maltin u x-xoghol tal-haddiema taghhom qed jizvinaw. Kullhadd lest
biex jghabbi t-taxxi u l-pizijiet godda fuq s-sidien tan-negozji u min bi flus
tal-istess sidien hu responsabbli li jgib ix-xoghol minn barra qed jinhela
fil-ftahir, fl-istudji u fic-cifri.

5. Il-pajjiz mill-MTA jrid azzjoni.
Azzjoni deciziva li ggib rizultati mmedjati. Jekk mhux ser jsir hekk ser nibqghu
nbatu lkoll.

Min hu responsabbli jaqbillu
jistenbah.

GRTU’s concerns are as
follows:
1. Employers are already extremely over-burdened by responsibilities
and these responsibilities extend equally to all employers whether employing one
person or 1000 persons. Maltese legislation does not provide any threshold. Over
the last years the amount of regulations being health and safety, labour laws,
planning, environmental standards, whatever, have increased enormously and no
single small employer can remotely absorb the knowledge of all these laws and
regulations let alone face the cost of their implementation. GRTU’s persistent
request for business impact assessments have consistently fallen on deaf
ears.

2. Besides the numerous government departments and public
authorities who impose regulations right, left and centre and the brigade of
inspectors these rules are creating, businesses have to watch out also for Court
Decisions. When the law does not specifically define the responsibility or
limits to the responsibility of employers, then the Court can make its
interpretation and in our case Court decisions are effectively additional forms
of regulation building as Court judgements are taken as sacrosanct.

3.
This case still awaits an Appeal Court sentence. As matters now stand, the
situation is very serious. The Court has found that an employer is guilty of
causing or leading to the cause of death of its employee and is liable to
damages if he/she has neglected to provide sufficient security and protection
for its employees against eventual aggressors and that it is the responsibility
of an employer to ensure the safety of employees against aggressors. Now this is
a tremendous responsibility on all shop-owners, garages, bars, restaurants and
all small service providers. What are the acceptable measures? All these
businesses and public places are all trying to be as friendly as possible to
visiting clients. Most shops are too small to have a back exit. Most offices are
on different floors. How on earth can any employer provide against aggressors?
And if they were able to, at what expense? And who is able to fork out the
expense?

4. GRTU says this while emphasising its concern at the
increasing level of aggression against shop-owners and their employees. GRTU in
fact as member of EuroCommerce is participating in a campaign organised by
EuroCommerce, as European employer federation in the Commerce sector and
Uni-Europe Commerce the commerce sector trade union block to highlight this
issue across Europe GRTU research shows that this situation is true in Malta
too, abusive verbal aggression and physical aggression against self-employed and
employed persons in the commerce sector is growing dramatically and very little
action is being taken by government and by the community at large to resolve
this growing menace.

5. It is now recognised that this is an issue that
cannot be faced by the small business owner by himself but it has to be tackled
by the community. For too long the media has been dominated by one theme:
consumer rights. Hardly anyone, excepts GRTU in representation of the business
community has done anything to stress that business people and their employees
have rights too. There are people out there, and not necessary the rough and the
illiterate, who do not miss a chance to be abusive to retail staff. Hold-ups are
increasing dramatically. Physical assaults on shop owners are on the increase.
Verbal abuse is a daily occurrence in many outlets.

Aggression needs a
common front against it. It is not simply a question of shops putting security
measures otherwise they face the Courts and have to pay for damages. Violence
and abuse is not diminished by simply turning our shops into fortified enclaves.
The good thing about this case is that an important issue is being highlighted:
aggression against people in business.

There can be no postponement of the
introduction of this bill, minister George Pullicino told The Malta Independent
on Sunday in a wide-ranging interview yesterday.

He aimed to clear up the
air after a comment made by the Prime Minister at the end of a tour of roads
outside Mdina in searing sun on Friday. Questioned by Super One’s Julia
Farrugia, Dr Gonzi said it would not be the end of the world if the new tax
comes into effect on 15 August instead of 1 August, but not if the
implementation of the measure is delayed until the new year.

This led to
the secretary general of the General Workers Union Tony Zarb calling the Prime
Minister’s attitude “disgusting”.

In a joint statement issued yesterday,
the representatives of the constituted bodies and the trade unions, in a rare
show of unity, condemned the way government has been taking its decisions in
this regard without any consultation with the social partners.

The
representatives of the Chamber of Commerce, the Federation of Industries, MHRA,
Malta Employers Association, GWU, UHM, and CMTU all expressed sadness that MCESD
is serving as a camouflage instead of being a serious and structured forum where
consultations and constructive discussions can be held in the national
interest.

The organisations thus asked for an urgent MCESD meeting, with
the Prime Minister present, “to establish clear and concrete procedures to
ensure that consultation does not become a frivolous word but a
reality.”

Mr Pullicino’s plan is that the bill, which was passed by the
House at the second reading on Friday night, will go to a full discussion at
committee stage tomorrow, both morning and evening and on Tuesday, and should be
voted in by Tuesday night.

As regards the implementation of the bill,
government was never tied to 1 August as the date of its inception, as there are
still some administrative and technical issues to solve. But the law has to be
passed and waste management cannot be delayed, he said.

There is some
flexibility from the government side, he added, but this is not open-ended. A
number of meetings with constituted bodies are also being held to iron out
needed clarifications.

Mr Pullicino, both in Parliament and in the
interview, hotly denied that no consultations have been taking place.

The process leading to this bill, he said, began in June last year and
it had taken so much time because of long discussions with the bottlers who, in
the end, could not come to an agreement.

Speaking in the House on Monday,
Mr Pullicino said that discussions had also been held with the Chamber of
Commerce and GRTU.

If the discussions had been prolonged, and the
introduction of the eco-contribution had been postponed, it would have slid to
next year, when it had already been announced in last year’s Budget Speech as a
measure to be put in place this year.

With important discussions being on
the cards with MCESD in the coming months, this also seems to be an important
signal sent by government to MCESD: that government accepts the need for
discussion but will not allow discussions to become of the round robin variety,
with no conclusion in sight. Government figures have already spoken about how,
with regard to the pension debate, people in government feel they have been led
up the garden path by the social partners and this delay obtained nothing except
further discussions and further delays.

Speaking in Parliament on Friday,
Mr Pullicino complained that people like Charles Buhagiar criticised government
for not doing anything except set up committees to do something, but then when
government was about to do something the same people told government to set up
committees!

Danish models

The present bill, Mr Pullicino
said, is based on one of the EU’s best eco-friendly legislations, that of
Denmark. Denmark, along with Sweden and, to a lesser extent, Germany, are the
leaders in eco-friendly countries in Europe.

This is only the beginning,
the minister said. To put in the whole Danish legislation would have created too
much of a shock to the country and to industry.

Denmark has eco-taxes,
clearly labelled as such, separated as due to, for instance, waste, energy
conservation, etc. Malta has chosen to introduce eco-contribution on waste
management only at first. Later on the rest of the sector will be
tackled.

Furthermore, the Danish model has eco-taxes on 600 products
including water and electricity pipes, adhesive tapes, packaging waste,
etc

Mr Pullicino told Parliament that Denmark has three levels of taxes
as regards bottles: 4c for small bottles, 9c for medium and 13c for large
bottles. The eco-contribution for batteries is 70c in Malta and Lm1.40 in
Denmark.

Some members in the House said that people who earn more than
the Maltese are to be expected to pay more taxes, but Mr Pullicino argued that
people in Bulgaria pay 32c per ton of waste and that even people in Albania, who
are far poorer than the Maltese, pay taxes on waste.

The three
options

In his speeches on Monday and on Friday, Mr Pullicino discussed
the three options discussed by government and outlined their pros and
cons.

1. Rates. This is the tax mostly used in Europe and it is also, in
a way, the sort of tax chosen by the Sant administration in 1997. It taxes every
door or else it taxes each house by its output of waste.

Government felt
this would not work in Malta since Malta, of all countries, is the only country
to have waste collection on a daily basis. It would be far too cumbersome to
calculate the weight of the output per door on a daily basis.

As to the
system chosen by the Sant administration, this was going to be a flat rate per
door, regardless of the building or the area. Elsewhere in Europe, rates differ
according to the area, whereas here in Malta the owner of a house in Ghaxaq
would be paying just the same as the owner of a villa at Madliena. Government
felt this was not a fair way of doing things.

2. The second option
considered was a tax on the sale of objects. This could have given government a
greater revenue and would perhaps have been easier and tighter to administer.
But government felt it did not want to further burden retailers.

3. That
left the third option: a tax or contribution imposed when the product enters the
country, not when it is sold. Government also chose to introduce it on a limited
range of products, so as to learn, itself, the administration of this
measure.

Changes in the proposal

Following the various
discussions that were, and still are being held, government has further amended
the draft so as to make it even simpler to administer and to create less
opposition to it.

The first misconception to be dealt with was that
government was about to create a new authority to administer this measure. One
opposition speaker after another fulminated against this, until the government
side informed them no new authority was being set up and the existing structures
would be used.

The second change regarded the part of the draft which
said people could be sent to jail if they were found to be in breach of the law.
This has now been changed on the insistence of the parliamentary secretariat for
the self-employed.

A possible third change may be announced in the coming
days. Many Opposition speakers complained that the bill and the eco-contribution
make no difference, for instance, between a fridge that is eco-friendly and one
that is not.

At first Mr Pullicino defended this by saying that the
system would be worked on the basis of the customs number which does not make
any such differentiation, and also that in the end, the waste generated by an
eco-friendly fridge is just as much as that generated by an eco-unfriendly
one.

But he told this paper yesterday that maybe there will be a
different eco-contribution to be paid in respect of small fridges and big
fridges/freezers.

The way the new tax has been brought in makes it easy
for producers to come up with their alternative waste collection system, which
will then make them exempt from the eco-contribution.

Consider, for
instance, the importers of bottles.

There is already a measure of
incentivising of glass against plastic in that one cent per glass bottle has to
be paid on entry but it can then be used again and again, while a plastic bottle
also costs one cent but cannot be reused.

And if the bottle importers
bring into existence a system whereby their bottles are recovered from the waste
stream, they will be exempt from the tax.

As for other products such as
tyres and television sets, it costs Wasteserve far more to cope with their
waste, but the price one pays has been kept low for social
reasons.

Open for discussion

It would seem, from
discussions held with various government persons over the past days, that
government acknowledges not enough time has been spent in discussion of this
measure and it would have liked to have had more discussion, but the coming
summer holidays, and the need to get this bill on the statute books before the
summer recess, have curtailed such discussions.

Nevertheless, Mr
Pullicino told this paper, government is still very ready to hold discussions
with all parties regarding the whole ecological tax reform. What is being
introduced is not the fully-blown system but an introductory measure.

In
his speech in Parliament Evarist Bartolo spoke of the Czech Republic's eco-tax
system. Apart from considering that the Czech Republic is not normally known for
its ecological supremacy, Mr Pullicino added that the Czechs have a system
whereby they pay from 15 to 20 Euros per ton of waste, and this is paid on a
personal basis, whereas in Malta it is the state which pays and in any case the
state pays less than the Czech citizens pay for the equal amount of
waste.

Government does have ideas about how the eco-taxes should be
structured in Malta and will be consulting the country before it goes about the
next step. In the meantime, the administrative capacity to administer such taxes
must be built and the country made to realise that it must pay for its
waste.

Mr Pullicino told Parliament on Friday that that very same day
government had received, in Maltese, the European Commission's positive verdict
on this new measure. Had this bill not been in line with European legislation,
he said – thus giving the lie to Vince Farrugia who claimed otherwise – the
Commission would have demanded further talks and
changes.

Tackling the environment crisis

What is uppermost
in Mr Pullicino's mind is removing as quickly as possible all danger from
Maghtab.

Maghtab is still ominously active: all the waste dumped there
over previous years is still boiling and creating chemical chain reactions
beneath the cap.

There are poisons in there, which any accident, such as
the shearing of the mountain, or the collapse of a part of it, could release
into the surrounding air.

Over the next months no less than 600 wells
will be dug on Maghtab and the resulting gas outflows incinerated.

As Mr
Pullicino showed journalists on Friday, every day around 500 truckloads of
construction waste are being used to fill up disused quarries.

The
Marsascala Sant’ Antnin waste facility will be made bigger and better with newer
technology.

The existing 50 bring-in sites around the country will be
increased to 300 by next year, along with bigger regional facilities as
well.

Waste separation at domestic level will be introduced in the near
future.

Yet Malta will never have 80 per cent of its waste separated. Not
even Germany can manage more than 40 per cent.

The collective expenditure
on waste will top e32 million over the next three years, with the EU forking out
e24 million.