15 JANUARY 2003

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Retailers relieved VAT is here to stay

By Ray Abdilla

Dr Alfred Sant's decision that a new Labour government will be retaining VAT was hailed as good news for the majority of the business community - especially small businesses in the computing, ironmongery and stationery sectors.

Most of them feel that having their minds at rest on the issue could only improve the situation. Some also said that Dr Alfred Sant should have decided to retain VAT long ago and not wait for the elections to come about.

The owner of Makaw Ironmongery in San Gwann told The Malta Financial and Business Times that although no one likes putting up prices because of VAT or any other tax, it was a relief hearing the Labour leader say that there would no changes in the taxation system.

"If you change the system it is not only the businessman who will suffer but also the country. Malta could not take the strain of changing the taxation system every time there's a change in government."

John Grech of New Millennium Computers, also based in San Gwann said that at last there was some good news spilt out by politicians: "I was afraid that we might return to the CET tax which was a farce. No one could understand such a system and it had brought a mess to our business.

"People had started to get used to the VAT system but when there was a change, we suffered. At least now we know in which direction we can move," he said.

Victor Chetcuti of VF Service Station, based in Gharghur, said that although he had not worked with the CET tax system because he had only been in business for the last three years, he is certain that if a change would occur again, it would be disastrous for business. He said that VAT is understood and managed by all now, so it was a relief hearing that VAT is there to stay.

Gilbert Mock, Sales Manager of Data Express in Ordinance Street, Valletta, specialising in the sale of satellite dishes and computers, said that it was good news that the MLP leader had changed his stance on VAT: "VAT is a taxation system that is used all around the world, so how could we not keep it? The CET system was a bit strange and it did not have the advantage of tax refunds, so I am in favour of VAT 100 per cent."

Jason Bianco, Manager of Banju Boutique, situated at Paola, said that there was not much difference between CET and VAT but since one has to spend a good chunk of money every time a new system goes in, it is better that VAT is retained.

"The difference between CET and VAT was that there was a different rate, but VAT is more simple to work on. What I do not agree with is that we have to pay VAT immediately on the work we bring from other countries. We have around 8,000 different products in stock with VAT already paid so it's money down the drain at the moment. It is only when we sell them that we retrieve the VAT on such items," Mr Bianco said.

Paul Grech of New Pages stationery in Mosta said that politics are important for every country but when issues such as VAT become too politically-motivated just for the sake of pique, things start to go wrong: "No one likes paying tax but if the VAT system is the best around, then we should retain it, and thankfully, common sense has prevailed."

Hubert Camilleri, Auto Dealer proprietor at Birkirkara, said that the best idea would be for someone to promise to take away VAT without substituting it for another tax.

"But I know that such a thing won't happen and another or a similar tax would be brought in. That I would not like, love or hate it. People have now got used to it.

"Tax is not something which someone loves paying, but we can't do anything about it. Let us hope that at least some politicians will have the guts to reduce VAT or any other tax because it is a burden on every one," Mr Camilleri said.


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Editor: Saviour Balzan
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