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The burden that this new tax presents on the small and medium sized business dealing in IT should not be underestimated. Every business is feeling the burden of having to allocate personnel and capital to handle existing tax collecting. The Eco contribution presents even more problems than VAT because it is based on different values for different items and not a straight percentage. This renders most of the existing software that is usually used to help in business accounting practically useless.
GRTU IT Section Meeting Re Eco Contribution
11th January 2005
1. The burden that this new tax presents on the small and medium sized business dealing in IT should not be underestimated. Every business is feeling the burden of having to allocate personnel and capital to handle existing tax collecting. The Eco contribution presents even more problems than VAT because it is
based on different values for different items and not a straight percentage. This renders most of the existing software that is usually used to help in business accounting practically useless.
2. The ECO contribution system could have been structured better and is discriminating on some items. We fail to see the relationship between volume or material content as opposed to the rate of tax.
3. The tax liable on some items is ridiculously high. Consider the tax on a Mouse costing 80c with Lm1 Tax and a CDROM drive that is worth around Lm5 with Lm5 Tax. The members suggested that to tax the IT industry it would be best to either make a flat percentage or else tax the Monitor and Case.
4. The computer industry is different in that many dealers assemble the computer systems locally. It must be kept in mind when applying changes to this tax that taxing individual parts will increase the price of a computer system beyond reasonable limits.
5. The rates on many items are excessive and as we are all aware that in spite of all the governments efforts tax evasion still exists. We are all preoccupied that the more taxes that are applied to our products the higher will be the difference in price between legitimate and illegal products.
6. Because the HS codes for particular IT products are often obscure and open to different interpretation. We feel that it would be in the interest of the government as well as our own to either have a harmonised system based on a few items, or a flat percentage rate or else the department is to draw up a list of practical
items with the tax associated.
7. Will the tax be liable on free items given with offer ?
8. With the current structure the tax allows for serious loop holes that may be exploited by businesses to the detriment of other businesses. A classic example is having companies importing computers with many hard disks and optical drives and then selling these products to a company owned by the same owner. In this way the first sale would have been done as a PC system incurring Lm14 tax and the items may be disassembled and sold as separate items without ECO tax.
9. What may be included as part of a computer system, such as can a keyboard, monitor and printer? or would they have to be charged separately?
10. What about items which are left over and used for spare parts? Would the tax still be liable ?
11. What if a cooperative would be created that collects computers and parts?
12. What about collect and recycle scheme for ink and toners ?
13. What happens when VAT is paid outside the country and items are brought over by Van?
14. What about items replaced under warranty?
15. What about enforcement?
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).