30 May- 5 June , 2001

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Government stands firm in the face of pressure to remove zero rating for food

By a political correspondent

Government ministers have sent a clear message to the European Union that they are against the implementation, to the last detail, of certain impositions of the acquis communitaire while other European Union member countries continue to impose their own different rates of VAT.

Speaking to the Joint parliamentary committee Finance Minister John Dalli said that other countries had zero rating on VAT and that Malta’s particular political situation merited special concern from the EU.

Most foodstuffs in Malta are covered by high levies and the eventual complete removal of these will lead to a drop in the prices of certain products.

But Malta is not the only country with zero VAT rating for certain products. In England and Ireland the zero rating for foodstuffs is zero, but in Denmark it is as high as 25%, France 5.5% and Italy 4%.

This is the first time that a comment in this regard has been expressed in open session.

It basically emphasises that the European Union should consider the delicate political bickering in Malta and that undue pressure in Malta could sway the balance in favour of the euro-sceptics.

But as the government focuses on the best possible deal for Malta, the Labour party continues to cry wolf over the lack of transparency in the negotiations process.

In the meeting of the joint parliamentary group, the MLP has been demanding the publication of the impact studies on the implementation of the acquis communitaire.

The European Union representatives, including the pro-Europe Mr Watts have backed them, but they have no idea that the only reason for such insistence is to supplant the oppositions ammunition for blocking entry into the European Union.

In the meantime the government continues to argue in favour of concessions in specific relation to the rights of foreigners to purchase property; an argument, which has had very significant connotations in political terms but very little impact on the purchasing trends of foreigners.

With prices of property in France, Greece, Italy, Portugal and Spain cheaper than Maltese homes, it is very unlikely that the threat of lifting thresholds on purchasing property will have any long term effect.


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