Eco-taxation… the carrot and the stick

Tonio Fenech has craftily used the logic to move from direct taxation to polluter-pays taxes to justify the increase in electricity bills criticised by the same opposition.

"From the 2008 budget we consistently reduced the burden of taxation on income, while the electricity and water tariffs started to reflect the international price of oil, and the investment in the generation and distribution systems."

Fenech flies in the face of criticism by environmentalists on the proposed use of Heavy Fuel Oil (instead of the cleaner gasoil) in the new power station, boasting that the Delimara Power Station will result in an improvement in air quality.

Due to its increased efficiency the new power station will also see a reduction of approximately 30% in fuel consumption.

He reveals that Enemalta is buying oil at more than $99 per barrel, when current tariffs are calculated using a price of $81 per barrel. However, the Corporation will not increase tariffs because of the positive impact that the power station extension of Delimara will have on reduced fuel consumption to produce the same level of electricity.

In addition to the schemes incentivising solar panels and photovoltaic's, which are being extended at the present subsidy rates, the government will launch another scheme for anyone who wishes to invest in the roof insulation and double-glazing.

This will consist of a grant equivalent to 15.25 per cent of the investment made. The grant will be capped at €1,000, to whoever undertakes this investment. But only a paltry €400,000 euros is budgeted for this scheme.

People with older cars will also have to pay more. In line with the polluter pays policy the registration tax on emissions for vehicles Euro 1 to 3 and older, which pollute more, will increase. Cars with emissions Euro 4 and Euro 5 will continue to pay the same rates currently in force.

For the second consecutive year the construction industry will see an increase in the customs duty on cement.

Urban renewal

The budget fails to penalise property speculation and empty buildings but addresses the problem through a number of fiscal incentives for the restoration of the "empty and derelict buildings in the town and city centres of Malta and Gozo which are on the increase".

The government is launching a scheme for private individuals who wish to restore their property where a rebate of 20 per cent will be given on the costs of restoration up to a maximum of €5,000.

Individuals or companies who restore properties with the intention of renting will benefit from a fiscal concession of a final withholding tax of 10 per cent on income from rent for residential purposes, and 15 per cent on income from rent for commercial purposes.

MEPA will be widening the permitted use for these types of properties so that their use as guesthouses, offices, and other commercial premises will be permitted, while remaining compatible and complementary to the residential zones.

Throughout 2012, Local Councils will benefit from €3.3 million in European Union and Maltese Government Funds during 2012 to carry out a number of projects concerning the physical appearance and history of our country's localities.

The government promises more open spaces to the public by inaugurating a new garden in Baħar iċ-Ċagħaq, starting work on a new Civic Centre in Swieqi, continuing with the project of the Golden Mile in St Julian's and carrying out several projects on historical centres, including Cottonera.