The government has collected close to €10 million in an eco-tax placed upon tourist stays in Malta since its inception. However, the figure does still seem to fall short of what should be expected in the face of growing arrivals and Malta’s booming tourist economy.

Since 2016, every establishment offering tourist accommodation in the country has been obliged to collect €0.50c per adult for each night, which is capped at €5. The eco-contribution must be paid within three months and is solely used for embellishment projects across the island.

Parliamentary figures show that while roughly €905,000 was collected in 2016, the first year the tax was introduced, this number has steadily increased to just under €4,000,000 in 2018 with just over €1,600,000 collected as of May 2019.

The figure, while high, doesn’t measure up to every single eco-contribution that should have been collected.

A rough look at tourism numbers indicates that much more should have been collected. With 42.2 million nights spent at ‘rented accommodation’ between 2016 and 2018, and with roughly three out of four visitors being over 18, the government should have collected closer to €15,000,000 over the three years.

Speaking to Lovin Malta, Tony Zahra said that the MHRA does have reasonable indications that not all of the eco-contributions are being paid out.

“[By looking at figures] It should be a fairly simple exercise to establish the amount that is due by those offering accommodation, it is a question of ensuring collection by the tax department and compliance with the law,” he explained.

“Regrettably Malta has a poor record when it comes to enforcement of regulations, in all sectors of the economy.  Consequently, we have a very  unhealthy situation where payment of eco-tax is virtually ‘optional’.”

“Of course, this is unfair for those that are paying the tax and are compliant.  MHRA has always maintained that the government is there to ensure a level playing field.  This can only be done if regulations are equally enforced with everyone without fear or favour,” he continued.

The issues surrounding the eco-tax have in the past recognised by the Finance Ministry, who in 2018 told Malta Today that there were “still pending issues when it comes to its collection from the operators of private accommodation hosting tourists.”

It should be noted that it is unclear who exactly is not paying the tax. However, it would be much harder for collective accommodation establishments, such as hotels, to dodge the fee rather than holiday apartment rentals that appear on websites like Airbnb.

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