A tax regulatory framework for food-related taxes in Malta : an analysis

Abstract

Purpose: This study reviews possible tax regulatory frameworks for the introduction of food related taxes in Malta. In particular, specific focus is given to the evaluation of possible dimensions available for the implementation of such taxes in the local scenario. Moreover, this study extends its evaluation to incorporate other aspects building up a tax regulatory framework. In so doing, this study reviews a number of European countries which have implemented similar taxes on a national level. Design: The objectives of the study were achieved through various semi-structured interviews with selected local tax practitioners, other representatives from the; VAT Department, Customs Department, Health Promotion Unit, Ministry for Finance and an economist. Furthermore, contacts with European tax practitioners where established. Findings: Findings suggest that if food-related taxes had to be implemented within the local context, an existing tax system should be utilised so as to mitigate the lacunas and bureaucratic aspects that might arise on the implementation of a home-grown tax. Furthermore, in line with foreign experience findings suggest that an indirect tax framework should be utilised. Hence, although there seems to be opposing views as to which tax platform should be employed, that is, whether to opt for VAT or excise taxation, the majority of the tax practitioners believe that the latter would be the easiest route. Conclusion: This study concludes that the subject under study is still at its infancy stages within the local context. In fact, the author concludes that the future of food-related taxes within the local context depends on EU pressures. However, if similar proposals are triggered at an EU level then Malta will follow suit. Value: Given that the subject under study has hardly been studied on a local level, this research sought to fill this gap. This entails that since in recent years a number of European countries have levied food-related taxes on a national level, this research sought to analyse whether the implementation of such fiscal initiatives would be feasible within the local context, and if so, to assess the most suitable frameworks available for their possible implementation.