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Chamber of Commerce reacts
to VAT on travel agents’ services
The Tourism Trade Section of the Malta Chamber of Commerce
has expressed its surprise over the publication of two legal
notices and the urgency with which they came into effect.
The Chamber said that “absolutely no consultation whatsoever
was held between the said body and the authorities despite press
statements from the Minister that such discussions will be held”
over Legal Notices 271 and 274.
Instead travel agents, the chamber said, had been presented
with few days’ notice to change entire systems of operation
within the industry to incorporate Value Added Tax in a nonsensical
and competition-distorting manner.
“Despite the changes within LN 274, airlines remain more
competitive than travel agents. Ancillary services to travel
tickets, previously not mentioned in the budget speech, have
also been included in the legal notice thereby once again distorting
competition and creating another uphill struggle for travel
agents. It is noted that, while insurance is an exempt service,
the authorities seem mistakenly to have included this in the
travel agents VAT scheme net.”
The chamber added that where an airline sells a package including
accommodation then no VAT is payable, whereas VAT will be payable
when purchased from travel agents.
“This mess that has been created, can only be put down
to a rushed job by people who feel they know more about the
Travel Industry than the actual players. People who want to
incorporate the European Sixth directive in a blinkered manner
and without having due regard to the fact that Malta is not
yet an EU Member and as such parts are inapplicable. Other parts
have conveniently been left out,” the Chamber said.
“This is in the week where travel agent licenses have in
some case been increased by over 800 per cent.”
The Chamber together with other constituted bodies are now actively
seeking meetings with the office of fair competition as well
as the Ombudsman in order to verify the legality of such competition-distorting
notices.
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