05 FEBRUARY 2003

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MHRA council votes unanimously in favour of EU membership

With the tourism sector representing roughly one third of Malta’s GDP, the pro-EU camp received another strong vote of confidence from the business community yesterday, with the 14-strong Malta Hotels and Restaurants Association council voting unanimously in favour of EU accession.
The vote, taken in the eleventh hour last Friday, is the culmination of four years of intense analysis undertaken by the association.
The studies were topped off by a membership survey conducted by Deloitte and Touche. MHRA President Winston Zahra Jnr also announced the association had studied both accession and the MLP’s Partnership documents before finally arriving to their decision.
"Today, the MHRA has given a chance for its members to speak out and express their views on EU accession. The MHRA has been diligent and professional in its approach, assuming an apolitical role in the conduct of these studies.
"Its decision has been based on the last four years’ work, through three presidencies. The MHRA council studied all documents pertaining to EU accession as well as the Partnership Option, when it had a meeting with Dr Alfred Sant. The council also studied various transcripts of Dr Sant’s speeches on the subject."
The MHRA membership survey conducted by Deloitte and Touche revealed an overall support of 99 per cent for membership out of all decided members.
Amongst restaurant owners, only 43 per cent of MHRA members responded: 24 per cent are still undecided, whilst 66 per cent are in favour of membership, and 10 per cent against.
A total of 76 per cent of three star hotel members responded to the survey, representing 36 properties and 3,243 rooms. The total for membership was that of 83 per cent, whilst 15 per cent are still undecided, and two per cent against.
In the four-star category, representing 33 properties with 5,691 rooms, 91 per cent were in favour of membership and nine per cent were still undecided.
A resounding 100 per cent were in favour of EU accession within the five-star category, representing ten properties and 2,150 rooms.
Altogether within the hotels category, with respondents representing 83 per cent of all members, and 79 properties and 11,084 rooms, nine per cent were undecided, one per cent against, and 90 per cent in favour. These hotels employ over 7,500 people.
"The survey is an undeniable statement that the only way forward for the corner-stone of the economy, is to join the EU," Mr Zahra said.
"We cannot forget our competing destinations are also about to join the EU. The status quo is nothing more than a slippery slide backwards, which is why we have to learn to move forward."
Mr Zahra also revealed findings from MHRA’s scientific analysis explaining how non-EU membership and EU membership would be affecting revenue flows for companies in the hotel and restaurants sector.
In the non-membership scenario, VAT fiscal policy would be affecting revenues between a positive 4.9 per cent to a negative 15.2 per cent. In the case of membership, revenues would be affected between a positive 0.8 per cent to a negative 1.1 per cent. Winston Zahra said the MHRA would continue to lobby for zero-VAT rating, which in turn he contended could only serve to generate more employment and concurrently more taxes for the government.
In terms of the introduction of the euro, this would affect revenues by a minus 2.9 per cent in the non-membership scenario, whilst in the case of EU membership, a positive 2.6 per cent.
In the case of the Tour Operator Margin Scheme, as a non-EU country, Malta is not impacted, whilst as an EU member, it will be incurring a negative impact of minus 1.5 per cent. As regards the UK airport tax, which had previously affected revenues by a negative 1.4 per cent, today, and even as of EU accession, the impact will be nil.
In total, the MHRA have estimated non-membership to sway its revenues from a negative 19.5 per cent to a positive 0.6 per cent. On the other hand, EU accession would guarantee a positive range of between 1.9 per cent to 2.2 per cent increase in revenues.
Remarking about the political manipulation of issues, Mr Zahra said that no issue could be treated in isolation and that the MHRA’s study had presented a scientific and objective study, which had yielded the grounds on which its council had voted.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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