GRTU discusses new excise developments with Customs and Excise Dept
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GRTU President Paul Abela, Deputy President Philip Fenech and CEO Abigail Psaila Mamo recently met Customs officials to discuss the logistical impact the new introductions in Excise will entail.
GRTU explained that discussions are still ongoing as members are very concerned with the impact the excise on wine and tyres will have. Other than the obvious financial aspect there is an important competitively argument and also a significant element of administrative burden.
“Whilst the aspects related to the economic impact and competitivity are being addressed with the Ministry, or at least we are awaiting to be given a meeting in this regard, the logistical aspect was discussed with Customs,” GRTU said.
GRTU pointed out that if enforcement is not done seriously and rigorously the problem of unfair competition will simply continue to amplify.
The Union said that “Customs have assured GRTU that they have a number of plans in place to tackle the points of entry which are currently not controlled enough and causing the unbalance in competition.”
GRTU added that it will “delve much deeper into this and will present proposals of how it believes market surveillance should be carried out and at the same time avoiding problems with the EU due to the issue of free movement of goods.”
Another issue raised by GRTU was that related to the difference between the Eco-Contribution and Excise. While the former is paid on sale the latter is paid on import which has a significant impact on cashflow.
Customs offered a solution of working on the same principle applied to alcohol today of having businesses put their goods in a tax warehouse, GRTU said. “This essentially would mean that the Excise is not paid on import but once the goods are gradually taken from the tax warehouse.”
GRTU discussed the issue with its members and it was noted that “this is not a solution they would opt for as it is still very costly. It would entail having their goods under lock and key, notifying Customs every time they need to take out some goods and having to pay the customs officer to open the warehouse for them.”
“This while still paying the full Excise duty and having a perfectly functional and equipped warehouse where they can store the goods themselves and take the goods when they need them without the need of notifying, paying and waiting on anyone,” the Union pointed out.
GRTU said that, together with its members, it has come up with what it feels is an acceptable solution to all parties that goods are declared on import, a bill is issued on import and must be paid within 6 months.
“This will give importers the minimum time required to sell most of their imported goods. It should also give the authorities safeguard that the payment will be made as the bill will be issued and therefore the goods have been declared. The only difference is in the credit terms. This we believe is a proposal worth discussing.”
The issue of administrative burden associated with the fixing of the excise band, which on a fast consuming product, as is wine, would result in a significant burden., was also discussed.
GRTU said that “while customs explained that they are ready to make it as easy as possible for those needing to acquire the bands there is little change that can be done in the system but they are looking into ways to changing the band into something else that gives higher value added and is easier to apply.”
Discussions on these issues will continue and GRTU said that it “awaits a meeting with the Minister for Finance to explain our concerns on the new excise additions and propose solutions.”