The impact of the environmental contribution tax on Malta’s local councils

Abstract

This long essay will focus on the functionality and limitations of Malta’s local councils and their role within Malta’s tourism zones. Through literature research and comparative analysis, this paper shall analyse the pros and cons of the practical functionality of the forthcoming introduction of the environmental contribution tax or guestnight tax of €0.50c that was announced in the Government’s budget for 2016. Government has decided that an environmental contribution be levied as of 1st April 2016, payable by all tourists above the age of 18 who visit our country. This will be a low rate of 50 Euros cents for each night spent in Malta but capped at a maximum for 5 Euros for each continuous stay. For this purpose discussions will be held with all stakeholders regarding the best implementation of this measure. (Budget Speech, Malta Ministry of Finance, 2016, p25) By comparing the current ECT funds generated and administered in other European countries, this long essay will study ways in which these funds may be adequately administered by the Foundation for Tourism Zones Development and how local councils may apply for such funds. The focus of this long essay is to highlight how the proposed environmental contribution tax may affect the local councils which form part of Malta’s Tourism zones, and how these localities and their residents may ultimately benefit from this proposed environmental contribution through funded projects.