Misleading interpretation of EU tax statistics


A letter in the Sunday Times (3 January) by Alfred Farrugia from the Malta Automobile Club caught my attention. Mr Farrugia mentioned the recently published EU statistics on taxation ‘Taxation trends in the European Union – Data for the EU Member States, Iceland and Norway’, which I had flipped through a few days before. I thought I might have missed something about the tax scenario in Malta.

The call for a reduction of vehicle taxation in Malta is misguided and downright dangerous. First of all when discussing taxation one must look at the total tax burden. The reality is that the tax revenue in Malta, including national insurance, is 33.6% of the Gross Domestic Product, with a long list of 17 other EU countries with a higher tax burden. Focusing on 3.49% of the total tax revenues coming from taxes on vehicles from cars just reflects one simple thing: the high rate of car ownership in Malta. What Mr Farrugia fails to mention is that in the countries he mentioned the share of taxes coming from cars probably comes from the lower rate of car ownership and not on the actual rates paid individually.

It is also pertinent to point out that residents in other countries have annual taxes on property, pay annual service fees to their local councils for services such as garbage collection, childcare and even fees to occupy on street parking spaces, not to mention higher indirect taxes.

Being a driver does not mean agreeing with Mr Farrugia. The impact of traffic in the country with the highest number of cars in the world is huge: from huge pressures on infrastructure, to spaces in our towns instead of available for people and children, gobbled up by parked cars and heavy traffic, not to mention the serious effects on health and the unbreathable air in heavily congested areas from Birkirkara, to Msida, Paola and Fgura, amongst other places. Less tax on vehicles means less money for our national health service (which incidentally treats people from the ill effects of pollution), less money for public transport systems (which need more investment to offer an efficient service), less money for our schols, pavements and pedestrian areas and gardens. Good public services are essential, or maybe some people want Malta to end up like the USA – where for most people except the very rich getting seriously sick or losing your job means becoming destitute.

Alternattiva Demokratika – The Green Party invites people to think longterm – on ways and means to reduce dependence on fossil fuels, on investment in making our towns and streets people friendly, on promoting actively the use of pedelecs and electric scooters for commuting and on making our roads safe for all, starting from the most vulnerable roads users: pedestrians and cyclists. By all means let us discuss what is fair taxation and what isn’t, but let us all keep in mind that good public services need sustainable income.

Ralph Cassar

Alternattiva Demokratika spokesperson on Energy, Transport and Infrastructure