What is the government doing with €47m?

The surplus is collected from vehicle taxation

By Alfred A. Farrugia

According to the draft financial estimates 2020, the government is estimating the collection of 142.1 million euro in vehicle taxation – 2.1 million euro from driving licences, 55 million euro in motor vehicle registration tax, and 85 million euro in annual circulation licence fees (tax).

In 2020, the government is estimating an increase of 6 million euro in annual circulation licence fees (tax) over the amount collected this year, 2019!

According to the same draft financial estimates, the government is estimating a capital
expenditure of 95 million euro – 85 million euro on the construction of roads and 10 million euro in maintenance work.

This means that the government is collecting 47.1 million more in vehicle taxation than it is
spending on road construction and road improvements!

It is not surprising that vehicle taxation in Malta as a percentage of total taxation is the highest in the EU!

This also explains how the government is making a surplus – a surplus on the back of car owners and drivers! What is the government going to do with the 47.1 million euro extra that it is collecting from vehicle taxation?

This year, 2019, the government collected 136 million euro in vehicle taxation – 2 million euro in driving licences, 55 million euro in motor vehicle registration tax, and 79 million euro in annual circulation licence fees (tax).

The estimated capital expenditure for the current year, 2019, in road construction and
improvements is 81.2 million euro.

In other words, the government is collecting another extra 54.8 million euro in 2019! Of course, the government is making a surplus – a surplus from the tax burden paid by car owners and drivers.

In these two years alone, the government is collecting more than 101 million euro from drivers and car owners, including those over 75 years of age.

It is time that car owners and drivers wake up and bring this government to its senses. It is true that this government is spending more on road construction than previous administrations, but vehicle taxation in Malta is still too high when compared to other EU citizens.

It is time for vehicle taxation in Malta to be reduced. There is no reason why car owners and drivers are targeted disproportionately – their tax burden needs to go down!