Eco-contribution changes will favour those that sold at the ‘old' higher rates
By Julian Manduca

A legal notice to adjust the eco-contributions introduced at the end of 2004 was published in the government gazette Tuesday with changes retroactive to 1 January 2005. This means that companies that sold products at the ‘old' rates will now only be asked to pay to the VAT department at the new lower rate of eco-contribution.
The legal notice was meant to be discussed in Cabinet Monday, following a decision by Prime Minister Lawrence Gonzi that all legal notices should be channelled through him before publication, but that discussion did not result in any surprises.
Legal Notice 28 of 2005 published Tuesday pushed down the eco-contribution on plastic bags from Lm10.67 per kilo to 6 cents per bag as had been announced by environment minister George Pullicino and Parliamentary Secretary Tonio Fenech January 7.
As widely reported, the eco-contributions on computer accessories were removed, meaning only computers (Lm14), monitors (Lm5) and printers are to be subject to the Green tax. In the case of printers, those weighing less than 10 kilos are subject to an Lm5 tax and those weighing more are subject to eco-contribution at Lm10.
Accessories such as mice and keyboards are now no longer to be subjected to eco-contribution. The new rates were welcomed by computer traders who, through the GRTU, had been pushing for exactly those changes. Tuesday's announcement will make it much easier for those importing and selling computers and their accessories to keep their accounting records given the large number of accessories that were being impacted by the old and diverse rates.
Also as expected, changes were made to the eco-contribution on shotgun cartridges and chewing gum. The sticky stuff will now be subjected to an eco-contribution of five mills per 2 grams instead of 5 cents per 10 grams as had previously been decreed.
Shotgun cartridges will be subjected to a tax of 2 cents each, but not those with shot weighing less than 24 grams, those commonly used for clay pigeon shooting, and those used for riveting or similar tools and for captive-bolt humane killers (ie the killing of animals). This will not prevent bird hunters from using the exempt cartridges and even refilling them with heavier lead.
The only unannounced change came in the form of an exemption on pillows, which were previously subjected to an eco-tax of Lm1.
Speaking to The Malta Financial and Business Times, an official from the finance ministry said that although the legal notice issued at the end of the year was legally binding, anybody receiving any notification of a change in the eco-contribution rates were to charge the ‘new' adjusted rate ie 6 cents for a plastic bag and nothing for a computer mouse, and are only expected to pass on the eco-contribution in line with the new rates.
Asked what rights consumers have given that the new rates have been introduced retroactively, the official said that few companies charged according to the old eco-contribution rates, but that if consumers kept their receipt which indicated the ‘old' rate, they would be within their rights to ask for a refund.
Those smiling the most following the adjustments announced this week will be any company that has sold many items with the ‘old' eco-contribution rate, as they will not only have to pass on the new lower rates. It is not expected that many consumers will be asking for refunds and it is certainly unlikely that anyone will ask for a refund on chewing gum – or will have kept the receipt.
The entire eco-contribution debacle has been mired in controversy since its first introduction. Much of the criticism was related to a lack of consultation, but the GRTU said the new Green taxes are and will have a very detrimental impact on business. The Malta Labour Party said the new ‘taxes' are and will have too deleterious an impact on peoples' living standards and called for the taxes introduced as a belated but unwelcome Christmas present to be removed. Alternattiva Demokratika and the environment groups were not impressed either and both insisted there should have been consultation and claimed the way the rates were introduced does not follow what is normally understood as an eco-tax. They said eco-contributions should be higher on those products that are damaging to the environment and low or non-existent on those products that do no, or little damage to the environment.