The Labour Party (PL) has offered to pay and support anyone who should challenge the government over the VAT registration tax, PL leader, Joseph Muscat, said on Saturday morning.He said that this decision was taken after the refusal of the government to refund all those who bought a car after the 1st of May 2004.

Indeed, European Commissioner, Mr Kovacs said that the Maltese taxpayers was entitled to seek redress over taxes collected in breach of EU Law.

The government said that such reimbursement could run into the €50 million.

The Ministry of Finance replies to Joseph Muscat

The comments by Joseph Muscat, offering legal aid to people who challenged the VAT charge on registration tax in court, confirm that the PL is wilfully misinterpreting EU Commissioner Laszlo Kovács’ comments on car registration tax, said the Ministry of Finance this afternoon.

The Opposition evidently had no sense of priority, even in a time of global economic crisis when the rest of the world was investing in industry, tourism, education and research, the Ministry said.

The PL was irresponsibly leading the public to believe that it had an automatic right to be reimbursed by the Government for VAT paid on registration tax, when neither the European Commission nor the European Court have said that the Government should give back this money.

Dr Muscat’s comments also revealed confusion and misinformation among the PL’s ranks, because after insisting for days that the Government had been ordered to pay back this money, it was now admitting that it is the Maltese Courts that must decide on this.

Finally, the Ministry said, the Opposition was either asking the Government to introduce new taxes to recuperate the €50 million that their demand would cost the state coffers, or to divert this money from initiatives that promote investment.

PL replies

In reply to the Ministry of Finance’s assertions that today the PL had confirmed its irresponsibility, the PL said that the Ministry’s comments confirmed the Government’s arrogance.

Minister Tonio Fenech may need to be reminded that the money had been collected directly from people’s pockets, and in contravention to EU rules, the PL said. It was therefore the right of the people to go to the Courts for recourse, and this had been very clearly confirmed by Commissioner Kovacs earlier this week.

If to take the Government to Court had now become irresponsible, then truly the Nationalist Government wished to deny its people their European rights.The Government has known about this problem for at least three years, and therefore it had ample time to regularise its position – but it had chosen not to.

The PL encouraged people who had payed this illegal tax since the 1st of May 2004 to await more details from the Party as to how they can access the free legal aid that it will be offering.

AD has its say

Alternattiva Demokratika is also encouraging people who have paid VAT on car registration tax since May 2004 to take the Government to Court.

‘We welcome Commissioner Kovács’ declaration that VAT should not be levied on the registration tax of cars and that those customers who have been charged VAT for acquiring such goods should be compensated by the government,’ Chairperson Alrnold Cassola said this afternoon.

‘For all these years, the Government has imposed an unjustified tax on the Maltese people, it has abusively made millions of euros by exploiting the Maltese consumers and therefore this money should be returned back to them.’

Prof. Cassola encouraged individuals interested in resorting to legal action to contact him.