Fabian Demicoli

ECO-TAX Development 3

As a result of the pressure and stand taken by GRTU
on behalf of the enterprises, traders and retailers affected by the imposition
of the Eco-Contribution Act approved by Parliament on 27th July 2004, government
has now accepted that:

1. Eco-Tax will not be levied on existing stocks
held by traders/producers as originally insisted upon by government.

The Eco-tax will not be levied on all listed products (refer to note 14) once
they leave customs as originally proposed by government.

3. Eco-tax will
not be levied on all listed items at customs on non-EU originating product and
no Eco-tax will be levied once non-EU-originating products leave customs, as
originally planned under the Act.

4. Eco-tax will not be levied on goods
held at Retailers. This was fundamental for GRTU.

5. Retailers will not
be burdened by any additional paper work or tax collection.

6. The
Eco-tax will be levied as follows:

6.1 On listed products once the first
VAT transaction is effected i.e. (a) either when trader or producer sell to
wholesalers or retailers, or (b) when traders or producers sell directly to

6.2 Eco-tax is payable by importers/producers (not retailers
or wholesalers) on the next VAT return due on all sales transactions of listed
items as from the 1st September. Sales transaction refer to all invoiced
transactions made by importers/producers to wholesalers, retailers or directly
to consumers. Sales transactions made by wholesalers, retailers to consumers of
items invoiced to them prior to 1st September, 2004 do not suffer Eco-tax. Items
sold to retailers prior to 1st September 2004 therefore remain Eco-tax free. All
items contracted for delivery after 1st September 2004 will suffer the Eco-tax
irrespective of the price on the sales contract unless a sales tax invoice has
been issued prior to 1st September, 2004. Any items not covered by a tax invoice
will suffer the Eco-tax.

6.3 Eco-tax is levied on products that are
transacted out of warehouse from traders or producers. Listed products already
on sale at retailers are not effected. Sales on the products to retailers prior
to effective date proceed as before.

7. The implementation date is 1st
September, 2004. Initially, GRTU had asked for postponement of implementation
till January 2005 so that current stocks could be depleted. But government has
now accepted that importers and producers will not have to submit a stock take
as up to the end of August 2004 and pay Eco-tax on all listed items on their
inventory. Also, since government has accepted that the Eco-tax will not be
levied on all listed products immediately as they leave Customs irrespective of
sales, GRTU has reconsidered its position. Therefore, GRTU now considers that
the date of implementation is no longer a major stumbling block. Yet, GRTU still
believes that government is rushing unnecessarily to introduce the tax as from
1st September 2004.

To make clear, the tax is now levied on first sales
transaction by importers/producers and not by retailers. Existing stocks will
not be charged and new imports/production will not be charged unless a first
sales transaction is effected. This does not mean that any sales transaction
after 1st September 2004 made by importers/producers will not be Eco-taxed if
the goods come from inventories held prior to 1st September 2004. All first
transactions will be taxed after 1st September 2004 irrespective of whether the
good comes from inventories existing prior to 1st September 2004 or from new
imports/production after 1st September 2004. What it means is that no tax is
levied on goods not yet on the market (transacted) before 1st September 2004, as
was originally planned by government.

8. The payment of the Eco-tax
will be made at the end of the VAT tax period due after 1st September 2004 and
payment is effected on every VAT payment date.

9. The VAT department is
the Authority that will administer the Eco-Contribution Act.

10. The
exact mechanism on how the tax is going to operate is still under discussion. A
Technical Commission is being set-up to discuss the technical aspects of
implementation. GRTU has successfully insisted that the Eco-Contribution is
considered as a cost which is incorporated in the total price of the product and
not invoiced separately. This means that like Excise duty the trader wil put his
mark-up after all costs are added and VAT is charged at the end as the last

11. The Eco-tax will be refundable only if approved schemes of
collection of waste generated by the listed items are in action. Discussions on
these will proceed under the auspices of the proposed Commission. At this stage
Eco-tax is to be considered as another unrefundable cost and it is charged to

12. The terms of reference of the proposed Commission will be
published shortly in the Government Gazette.

13. The Legal Notice will
qualify the Articles of the Eco-Contribution Act as they apply to
administration, collection of the contribution and other technical aspects and
official forms will be issued later by the VAT department. In the meantime, the
Act has been published and it is available on the GRTU’s website.

14. The
listed items are as per attached Schedule. The Legal Notice will however
introduce important changes on certain items:
(a) The published list referred
only to electrical appliances and not to gas appliances. The Legal Notice will
also indicate gas appliances as subject to Eco-tax. These fall under HS Codes
7321 and 8419.

(b) Those items that fall under the HS Codes 851660,
7321, and 8419 and have a weight of less than 2 kilos will be exempted from

(c) Batteries will be charged Eco-tax but the tax will not be
levied also on separators.

The tax is payable by importers/producers and
not retailers when the VAT return is due on all first invoiced transactions on
the listed items effected after 1st September and payable with VAT.

importers/producers have to register and obligations are similar as under the
VAT Act.

GRTU members are advised to make the necessary preparation and
to pass on questions, advice or proposals to GRTU by e-mail on
and to watch the GRTU website for further information.

We need
information on any waste recovery programme in action or proposed. We thank you
for your support and assistance.


What we can do for you










The Malta Chamber of SMEs represents over 7,000 members from over 90 different sectors which in their majority are either small or medium sized companies, and such issues like the one we're experiencing right now, it's important to be united. Malta Chamber of SMEs offers a number of different services tailored to its members' individual requirements' and necessities. These range from general services offered to all members to more individual & bespoke services catered for specific requirements.

A membership with Malta Chamber of SMEs will guarantee that you are constantly updated and informed with different opportunities which will directly benefit your business and help you grow. It also entails you to a number of services which in their majority are free of charge and offered exclusively to its members (in their majority all free of charge).