Fabian Demicoli

GRTU calls for fairer application of the tax system

GRTU President and CEO have this week participated in a
Business Breakfast organised by the Malta Business Weekly where the Prime
Minister, Hon Joseph Muscat, was the keynote speaker.

Dr Muscat's speech was indeed very interesting. He
confirmed that an increasing chunk of our sales is being done on the internet.
The Government has only a rough estimate of this as transactions through PayPal
only amounted to €66M in 2013. This is double what it was 4 years before in
2009. At the same time we are seeing the level of retail trade going down and
this is very probably a factor. This phenomenon cannot and shouldn't be stopped
but local shops should invest to be able to compete but support is needed to do

On the issue of unfair competition with goods coming
in through various channels and evading VAT, excise duties and eco-tax the
Prime Minister said that the situation will no longer be tolerated and that a
level playing field must be ensured. Dr Muscat stressed that Sicily is part of
Europe and imports coming from Sicily cannot be treated any differently. "In
this regard, and in full respect of EU rules, Government is currently compiling
a new and updated package of market surveillance rules in order to ensure a
level playing field".

GRTU welcomed the approach Government is taking. In an
intervention GRTU CEO Abigail Psaila Mamo stated that this is an issue GRTU has
been insisting for a long time  and our
members are pleased to see that the issue is being taken seriously and concrete
action is planned. Unfair competition is hitting our members very hard and the
situation cannot be sustained any longer.

In addition to this the CEO raised the issue of
taxation privileges. She stated that while we endorse Government's efforts of
attracting new investment to Malta and agree fully that the Government should
do its utmost to make Malta as attractive as possible we need also to be choosy
of what investments it attracts. Unfortunately the positive discrimination
related to a very advantageous tax refund is being utilised by foreign owned
businesses sectors of which our market is already abundantly saturated such as
retail outlets and restaurants. This is resulting in increased unfair
competitive pressures on Maltese owned businesses that have to compete with
businesses that end up paying only 5% of the tax due while they pay 35%. 6/7 is
refunded back to these foreign owned businesses within 48 hours. This is very
unfair and is resulting in the closure of local businesses as they have no hope
of competing.

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