GRTU extends its campaign for the reduction of excise tax on diesel

GRTU leaders this morning addressed the media together with Dr Attard Montaldo, Member of the European Parliament, to add pressure on Government to take action to reduce the excise tax on diesel. He is a member of the European Parliament Committee on Industry and Energy and of the Committee of Transport and Tourism.

GRTU supports the lobbying and pressure organized by the International Roadtransport Union (IRU), to which GRTU members from the passenger coaches and trailers` sections belong, and of UEAPME (the European Association of Craft, Small and Medium Enterprises) for the reduction of excise duty on diesel or alternative measures to reduce the price of diesel.

In today’s media event Vincent Farrugia, Director General of GRTU, gave details of the discussions held with the Prime Minister last Wednesday, when GRTU’s claim was at the top of the agenda. Vince Farrugia also explained that though the Prime Minister confirmed that Government was willing to discuss GRTU’s proposals for the relief of unnecessary costs and pressure on transporters, Government was not prepared to intervene through a reduction of taxation on diesel.

GRTU insists that it is not true that Government is being restricted by the European Commission not to reduce the level of taxation per litre of diesel. The minimum taxation imposed by the EU is €302 per tone, while the level of taxation in Malta is €320 per tone. It is true that the minimum level of taxation should go up to €330 per tone by 2010 but the imposition of this high taxation level is being argued against by road transporters, industry and commerce at European level. Road transporters and the commercial sector through EuroCommerce, of which GRTU is also a member, are making pressure on the European Commission to retreat from the obligation it is imposing to raise the minimum level of taxation from €302 to €330 per tone.

GRTU further contends that the Government of Malta has between 2006 and 2007 increased its annual revenue from excise duties on fuel by €25m and this year government estimates to collect €90m from excise duty on fuels. This in addition to the other €80m on transport such as annual road taxes and registration taxes.

Vincent Farrugia insisted that Government is overloading the transport sector unnecessarily with taxation. Government has ample financial revenues collected from vehicle owners, according to the 2008 Financial Estimates, Government expects to receive €90m from excise duty on fuels, €30m from vehicle and driving licenses and €49m from vehicle registration tax, a total of €169m in just one year. GRTU expects Government to relieve transporters from the excessive tax burden they are carrying to mitigate for the increase in price of imported fuels, the easiest solution is for them to pass on the additional expense to commercial and industrial users and consumers in general.

“Economically, this is a very slippery road to follow”, Vince Farrugia emphasized, “Malta is already suffering from a cost-push inflation of 4.7% according to the HICP Index. GRTU believes that Government should be taking remedial action to calm the inflationary push and mitigating for the increased fuel cost to transporters is one effective action GRTU recommends Government to take”

Dr Attard Montaldo explained that he has offered to help GRTU because he, as a member of two important sub-committees of the European Parliament, is in a position to confirm that what GRTU is saying is not only correct but also just, in a European context. Malta as an island suffers greater pressure as a result of the increase in fuel prices than other larger countries. He together with the other Maltese MEPs is constantly reminding the European Union that an island economy like Malta cannot sustain the level of minimum taxation which is acceptable for other larger countries on important imported products such as fuel for transport and distribution.

Dr Attard Montaldo insisted that his presence at the GRTU conference was precisely to confirm that what GRTU is demanding on behalf of its members in Malta is also what is being discussed at European level. The crucial point is that the Governments of Member States must react positively to the transporters` demand, especially in a island economy like Malta, where the cost of fuel and transport compared to the average income is high and where transport costs highly effect the competitiveness of goods and services.

The conference was also addressed by Ms Sylvia Gauci, a Council member of GRTU and one of the two Maltese employers representative at the European Economic and Social Committee (EECS). Sylvia has just presented an own initiative paper, which will be discussed in the EESC plenary session this week precisely emphasizing the need of the European Commission to give greater importance to the problems suffered by island economies particularly due to the rising costs of fuel and energy products.

Concluding the conference, GRTU President Paul Abela, said that the GRTU approach is to raise issues that are relevant to GRTU members and to the economy in general and to convince Government to act effectively to resolve the problems. When the dialogue is correct it should lead to remedial action without the need of public protests as is occurring in other European Countries.