Issue link: https://maltatoday.uberflip.com/i/248536
4 News maltatoday, SUNDAY, 26 JANUARY 2014 €31 million in VAT to be refunded over seven years ALL persons who purchased a vehi- cle for personal use between 1 May 2004 and 31 December 2008 will receive an ex gratia payment, the government announced today. In a press conference held at the transport ministry, three ministers announced the refund scheme which applies to the first licensed owners of vehicles, including motorcycles, in the four-year period. "This is a government that implements what it pledges and guarantees justice to consumers," justice junior minister Owen Bonnici said. The refund is of a portion of VAT that was charged not only on the cost of the car, but also on the registration tax payable on the car. Finance minister Edward Scicluna explained that the refund scheme will cost the government between €25 and €31 million. It was a commitment Labour promised well into the early days of Joseph Muscat's leadership. "Contrary to the criticism prior to the election that parties were promising heaven on earth, this scheme confirms that the homework we did before the election was reasonable and we will not burn a hole in the national budget," Scicluna said. He added that the refund, from which an estimated 40,000 owners will benefit, will be spread out over seven years and all vehicles purchased in the four-year period, new and second-hand, will be included in the scheme. Scicluna added that 60% of beneficiaries will receive between €500 and €1,000, and on average applicants will benefit from a €771 refund. Each The refund is a portion of VAT that was charged not only on the cost of the car, but also on the registration tax payable on the car PHOT0: DOI - OMAR CAMILLERI JURGEN BALZAN From left: Owen Bonnici, Joe Mizzi and Edward Scicluna applicant will receive the net sum over the seven-year period, with the first instalment being between €10 and €90. Anyone due less than €65 will be paid in full during the first year. Transport minister Joe Mizzi said the tax was ruled as illegal by the European Commission in 2009, and that the government was doing what the previous administration had failed to do. Transport Malta will start paying the refunds in April, once the applications are submitted and processed, Mizzi said. The minister added that by February, TM will send a letter to all eligible owners on the address stated on the current ID card, informing them of the amount they are due. He added that the authority will set up a customer service desk which will handle queries over the refunds. The scheme applies to first licensed owners of vehicles, irrespective of whether the vehicle is still in their possession when the applicants apply for the grant, or whether the vehicle has been scrapped. Deceased persons are not eligible. Government vehicles, taxis and other commercial vehicles exceeding 3.5 tonnes do not qualify for the refund. Licensed vehicle dealers or importers do not qualify unless the vehicles were registered and licensed in their personal capacity and intended for their exclusive personal use. The reported expenditure shall not exceed the amount of value added tax paid by the applicant on the registration tax when the vehicle was initially registered. In the 2014 Budget, the Labour administration allocated €3.5 million to commence the refund of car reg- istration tax. Under the previous PN administration, more than 18,000 car owners had started a class actions lawsuit on the initiative of the Labour Party. The party had sought a VAT refund on cars bought prior to registration tax rules being amended in 2009. Bonnici said that the lawsuit will be dropped once the scheme comes into force. jbalzan@mediatoday.com.mt Farrugia: 'Pride' prevented agreement on IIP CONTINUES FROM PAGE 1 Asked why consensus had not been reached between both parties, Farrugia said that a compromise was easily within reach "but pride prevented both political parties from finding an agreement." Farrugia also warned that Malta was possibly facing European Commission infringement proceedings, and called on both parties to reach agreement on the scheme which "enjoys the entire country's backing". The MP in fact reiterated her support for the investment scheme, but Farrugia said that government should launch a programme that would not attract negative attention as the IIP undeniably did, com- Marlene Farrugia manding the attention of the world press at one point. The MP has had to fend off comments on social media from Labour voters shedding doubt on the her loyalty to Labour, which enjoys a nine-seat majority. In a comment posted online, the MP said: "You can present a motion for my expulsion from the party whenever it suits you. Don't forget to tell party delegates you want me out because I believe Malta should come first and foremost... before Joseph (Muscat) and Simon (Busuttil) and before you, my friend..." Asked yesterday whether these comments were a sign that she had had enough of being a Labour MP, Farrugia said, "No, not at all." "Parties change and evolve, however it's up to individuals to decide what is in the country's best interest… if Labour had to kick me out it would betray the party's calls for inclusion and national unity." The MP over the last year has voiced discreet dissent on a number of issues such as the botched attempt to push back migrants and the Mistra Heights development. "My criticism has always been constructive and my support to the government is guaranteed. "But I also have my dignity and I put the country's dignity above anything, including politics. If we really believe in the [Labour] movement that pledged to put the country's interests above partisan politics, we should seek consensus on issues which affect the whole country."