3 – 9 January 2001

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Chamber of Commerce shocked over VAT incorporation

Labels move nonsensical and competition-distorting

The Tourism Trade Section of the Malta Chamber of Commerce yesterday expressed its surprise at noticing the Legal Notices which call for travel agents to change their systems of operation to incorporate Value Added Tax.
The Chamber’s tourism section said yesterday that absolutely no consultation was held between the said body and the authorities despite press statements from the minister that such discussions will be held.
Instead, travel agents have been presented with just a few days’ notice to change entire systems of operation within the industry to incorporate Value Added Tax in a nonsensical and competition-distorting manner. Despite the changes within LN 274, airlines remain more competitive than travel agents.
Meanwhile, ancillary services to travel tickets, previously not mentioned in the budget speech, have also been included in the legal notice thereby once again distorting competition and creating another uphill struggle for travel agents. It is noted that, whilst insurance is an exempt service, the authorities seem mistakenly to have included this in the travel agents VAT scheme net. Where an airline sells a package including accommodation then no VAT is payable whereas VAT will be payable when purchased from travel agents.
The Chamber stated that this "mess" that has been caused can only be put down to a rushed job by people who feel they know more about the travel industry than the actual players. The Chamber adds that people who want to incorporate the European Sixth directive in a blinkered manner and without having due regard to the fact that Malta is not yet an EU Member and as such parts are inapplicable while other parts have conveniently been left out.
Strangely enough, the notice comes about in the week where travel agent licenses have, in some cases, been increased by over 800 per cent.
The Chamber, together with other constituted bodies, are now actively seeking meetings with the office of fair competition as well as the Ombudsman in order to verify the legality of such competition distorting notices.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt