Chamber calls for postponement of eco-contribution tax

The Malta Chamber of Commerce has expressed its disappointment at the government, for its “refusal to enter nay consultation on the matter of eco-contribution tax in the tourism industry.”

Representing its members, including The Federated Association of Travel and Tourism Agents (FATTA), the Federation of English Language Teaching Organisations Malta (FELTOM), the Professional Diving Schools Association (PDSA) and the Malta Association of Hospitality Executives (MAHE), a press statement by the Chamber adds that there had been a number of “futile attempts” towards discussions.

The chamber added that the lack of consultation with all stakeholders has meant that feedback was restricted to one association, and that as a result, it was not representative of all the tourism industry.

“The strength of an organised stakeholder is the knowledge it holds of its particular sector, niche, and members. Therefore, had consultation taken place, the eventual repercussions on the industry stakeholders would have been kept to a minimum,” the statement reads.

“The de facto introduction of the Eco Tax on 1st June will not only create an administrative nightmare, but it will also have a negative commercial effect on the industry especially with those tourists coming over on prepaid packages,” it reads, adding that the overwhelming majority of all incoming tourists come to Malta on prepaid packages.

The chamber pointed out that although the administrative burden needs to be addressed when any change of tax collection takes place, the date of implementation does not allow enough time to ensure that they are done effectively.

“This will result in a period of manual administration for most operators, needless to say peak season for tourism will never be the right time. Over and above this, ample time for an effective information campaign needs to be factored in,” it adds.

The chamber insists that any implementation date before 1st November will essentially mean that operators will very likely have to absorb this tax themselves.

“This implementation date would allow for the tax to be communicated effectively with stakeholders based overseas, to coincide with winter season contracts and to allow time for inclusive consultation.”

Terming the government’s refusal to postpone the implementation date to the 1st November, “unacceptable,” the Chamber recommended that the government reconsider its position on the matter, and to include more stakeholders in the discussion.

The tourism product is a key priority for our visitors and the main objective of the introduction of the Environmental Contribution is to improve quality along the tourism value chain. All revenue generated from this initiative will be exclusively directed towards the upgrade and embellishment of  local infrastructure in various touristic areas.

Tourism ministry reiterates that Eco-Contribution tax will be kept out of travel packages and accomodation tariffs

The tourism ministry has reiterated its stance that the eco-controbution tax will be kept out of any travel package or quoted accommodation tariffs so that it will be exempted from added margins, commissions, VAT or any other charges.

In a reaction to the Chamber's concerns earlier today, the ministry said that it must be made clear that the responsibility of collection lies with the accommodation provider and not any other operator.

"This explains why a number of talks were held with the MHRA, as two-thirds of tourists stay in hotels and similar collective accommodation," the statement reads.
 
"Furthermore, in recognition of teething problems that may be experienced in the initial months, the Government is making a concession for a 15% refund of the contributions due between June and October 2016 (both months included). This should make up for any contributions which may not be collected for some reason or other while the system is being implemented."
 
The ministry added that the government had announced the introduction of the tax last October during the 2016 budget speech delivered by the Minister for Finance in the House of Representatives, so that everyone could advise their principles as required.

"The Chamber requested a meeting to discuss this matter with the Minister for Tourism only two weeks ago, during which the subject was discussed in further detail," the statement adds.
 
The statement goes on to point out that the government is committed to introduce this Environmental Contribution on the 1st of June 2016, but it will be closely monitoring the process to assist everyone involved and to offer any necessary assistance.