Environmentally related taxes by economic activity First quality report following first data transmission under Regulation (EU) 691/2011 Country: Malta Date: 1 st October, 2015 Contact person: Ronald Tanti Email: ronald.tanti@gov.mt Regulation (EU) No 691/2011 in article 7 requires that Member States shall provide the Commission with a report on the quality of the data transmitted. The quality criteria as referred to in Article 12(1) of Regulation (EC) No 223/2009 shall be applied. Those quality criteria are: relevance, accuracy, timeliness, punctuality, accessibility and clarity, comparability and coherence. Relevance The National Statistics Office (NSO) has done work on environmentally related taxes for several years by reporting data to Eurostat/OECD. However, definitions and classifications of environmentally related taxes are not straight forward. In this report we present calculations following the Eurostat definitions. Environmental taxes breakdown by industries are based on general Government environmental taxes data on products and production, and are informed by the latest available supply-use tables. From these sources it is possible to estimate allocations of environmental taxes to individual industries. Estimates of general Government expenditure by COFOG, are updated once a year to include the most recent National Accounts public sector statistics. Estimates of environmental taxes by industries are updated annually in line with latest public sector statistics and additional supply-use information analysis. The environmental taxes data are compiled in accordance with SEEA 2012, which is built on the national accounting standards set out in the United Nations, System of National Accounts 1
2008 (SNA 08), the Eurostat handbook on the compilation of environmental taxes as well as SEEA 2012. Since different countries have different taxes, 4 main categories of environmentally related taxes have been defined. This has been done for reporting purposes and with the aim of making international comparisons possible. The four main categories are: Energy taxes Transport taxes Pollution taxes Resource taxes Environmental accounts measure what impacts the economy has on the environment (e.g. pollution) and how the environment contributes to the economy (e.g. use of raw materials, resource efficiency, etc.) by using the accounting framework and concepts of the national accounts. The data covers the Maltese islands and is provided in monetary units. Accuracy Accuracy of the data is difficult to determine. It should be noted that most of the data originated from various administrative sources and therefore they are not subject to a sampling error. One way in which to measure accuracy is reliability and this can be determined according to the magnitude of revisions. So far we have made 2 revisions in the data sets in particular to the transport taxes. Timeliness and Punctuality The Regulation requires the transmission of environmental taxes to be provided on 30 th September 2015. This year, Malta transmitted the data to Eurostat for the year 2013 on the 1 st October 2015. Data acquisition and recording Timeliness (t-2) is primarily determined by the availability of the basic statistics related to the taxes. When the basic statistics are revised, these revisions are taken into account in the calculation and any corrections to previous years are published with the current results. 2
Environmental taxes by industries are computed annually by the National Accounts Unit with latest data available for the period 2010. This allows estimates to be based on most recent supply-use data that incorporate latest National Accounts information regarding the composition of the economy. Accessibility and Clarity Environmental Taxes data and text are presented in as clear a way as possible to ensure access to as wide a range of readers as possible. Plain English definitions are given where technical terms are unavoidable. Till present data has not yet been published on our website but it is available when it is requested. General enquiries on the data compilation methods, quality information or difficulties querying the latest figures can be emailed to Environment.nso@gov.mt Comparability and Coherence Environmental taxes data are available from the year 1995 onwards with the exception of the pollution taxes which commence from the year 2004. The data originates from the Government Finance unit within the NSO. This unit collects the taxes data on an annual basis in view of Council Regulation 2516/2000 which amended the Regulation on European system of national and regional accounts in the Community (ESA 10) as concerns taxes and social contributions and clarified the rules concerning both the time of recording and the amounts to be recorded. The time of recording is defined in ESA 10 4.26 and 4.82 as the time " when the activities, transactions or other events occur which create the liabilities to pay taxes". In Malta the main method for recording taxes is the time-adjusted cash. The time adjusted cash method is applied for VAT (D211), Income Tax (D5) and Social Contributions (D6), which cover around 80.2% of the total taxes received by the General Government Sector. 3
The other taxes, including the environmental taxes, are recorded on a cash basis and are adjusted for accruals using the Treasury s accruals template, which are based on the realisable debtors balances as recorded on the books of the tax authorities. The data is thus compatible with the National Tax List and is only revised when the Government Finance Unit makes the required necessary revisions. Thus, Environmental Accounts are a satellite account of the main National Accounts. It is to be noted that, estimates of environmental taxes published in the Environmental Accounts are consistent with the ratios derived from supply and use tables used in the National Accounts. Energy taxes (including CO2 taxes) This group includes taxes on energy products used for both transport and stationary purposes. The most important energy products for transport purposes are petrol and diesel. Energy products for stationary use include fuel oils, natural gas, coal and electricity. The CO2 taxes are included in energy taxes rather than in pollution taxes due to several reasons. Often they are integrated with other energy taxes and cannot be separated in the national accounts. Another reason is that they may have been introduced as a substitute for other energy taxes. Transport taxes This group mainly includes taxes related to the ownership and use of motor vehicles. Taxes on other transport equipment (e.g. planes), and related transport services (e.g. duty on charter or scheduled flights) are also included here, when they conform to the general definition of environmentally related taxes. The transport taxes may be one-off taxes related to imports or sales of the equipment or recurrent taxes such as an annual road tax. Taxes on petrol, diesel and other transport fuels are included under energy taxes. Pollution taxes This group includes taxes on measured or estimated emissions to air and water, management of solid waste and noise. An exception is the CO2 taxes, which are included under energy taxes as mentioned above. Resource taxes (excluding resource taxes on oil and gas) Resource taxes are taxes on extraction of natural resources, except taxes on oil and gas that are meant to capture the resource rent. Taxes on resources in Malta are quite straight forward since we only have income which is derived from the granting of oil license explorations. 4
Methodology and Data sources The new Regulation entails a more detailed Nace Rev 2 A*64 industry classification which is now including CO 2 taxes. However, this new classification has not affected the way Malta reports environmental taxes since such taxes were already included in the previous data reporting. The data sources for Environmental Taxes in Malta originate mainly from the Public Finance and National Accounts units within the NSO. The Public Finance Unit compiles data for Transport, Pollution, Resource and Energy Taxes in an aggregated sectoral manner. The National Accounts unit works on this data in a more detailed way segmented by the NACE and CPA codes. Data regarding taxes on Production and Imports and on Income and Wealth is requested every September of each year from the Public Finance Unit. Having received the data this is checked and validated before the Environment and Resources Unit proceeds to work on the Environmental Taxes questionnaire as requested by Eurostat. In order to be able to distribute the taxes according to the NACE Rev 2 categories, the Environment and Resources Unit, consults with the National Accounts Unit in order to compute ratios based on the Supply and Use Tables. Ratios are then applied accordingly for each data set as explained here under. Transport Taxes: Data from 1995 to 2008 contains the allocation of Airport tax. However, due to a change in the Maltese legislation in 2008, the Airport tax was removed and as a result of this situation, data from 2009 onwards does not feature any more this type of tax transaction. The transport taxes data for the industrial activities and services was worked out on the fuel consumption ratios across all the NACE sectors which were derived from the Supply and Use Tables of 2008 for periods 1995-2009, whereas for periods 2010-2013 the Supply and Use Tables of 2010 were used since these are the latest available at the NSO. Taxes data for households was derived directly from the transport statistics which are available at the NSO. Pollution Taxes: This data contains the allocation of Eco contribution based on the supply side of the products as per the Eco contribution Legislation. This data was then segmented accordingly among all the NACE Rev 2 sectors using the information available from the Supply and Use Tables of 2008 for periods 2008-2009 and for periods 2010-2013 the Supply and Use Tables of 2010 were used. The allocation of pre 2008 data was based on the output of the Supply and Use tables of 2004. 5
Resource Taxes: Only one field is applicable for Malta within this Tax band, which is B 05- B 09 Mining and quarrying. The data is related to the rental of oil licences, which is directly derived from government s official sources. Energy Taxes: This group includes taxes on energy products which are petroleum, bunkering and electricity. These products are used for both transport and stationary purposes. Extraction of this data originates from administrative data bases which are administered by the Public Finance Unit within the NSO. Other assessments and quality reports The data used for the Environmental Taxes is obtained from the Public Finance Unit within the National Statistics Office (NSO) which publishes its Excessive Deficit Procedure (EDP) Inventory on the NSO website at: http://nso.gov.mt/en/nso/sources_and_methods/unit_a2/public_finance/pages/unit-profile.aspx This is an inventory of the methods, procedures and sources used for the compilation of the deficit and debt data and the underlying government sector accounts according the ESA methodology. The environmental taxes are recorded on a cash basis and are adjusted for accruals using the national Treasury s accruals template, which are based on the realisable debtors balances as recorded on the books of the tax authorities. Malta makes 2 types of transmissions: 1. Detailed tax and social contribution receipts by type of tax or social contribution and receiving subsector for General Government (Table 9 in this Inventory Manual), and 2. Detailed list of taxes and social contributions according to national classification (National Tax list) at the end of September for the previous year. (This is Table 999 in the Inventory Manual). In November the news release Tax Revenue is then published, where data is split by type of tax and not by economic function. As yet, Malta does not have any national quality reports available for the Environmental Taxes. 6
Appendix A Tax Classification Description Compilation Method Transport taxes Contains allocation of: Airport tax till 2008 All other transport taxes: Motor Vehicle Registration Tax Sale of Number plates - Govt Sale of Number plates - HH Sale of Personalised Number Plates Adm Charge - Test Motor Veh Motor Vehicle Lic- Business Sale of Number Plates - Business Driving Licences This has been based on the use of air passenger transport services; the detail of which is not found in the published SUT 2004, but was obtained from the detailed national accounts product classification of SUT 2004 Flow of Motor Vehicles in year n; GFCF in motor vehicles (CPA 34) from national accounts Based on the fee paid for new motor vehicles registered per annum Based on the fee paid for new motor vehicles registered per annum Based on the fee paid for new motor vehicles registered per annum Based on the fee paid when applying for the driving licence test per annum Flow of Motor Vehicles in year n; GFCF in motor vehicles (CPA 34) from national accounts Based on stock of Motor Vehicles in year n Based on the fee paid for the driving licenses to be issued or renewed in year n Motor Vehicle Lic - Households Based on fees paid for new driving licences issued per annum These other transport taxes could be allocated as suggested; this data is not available from SUT 2004 Contains allocation of: Eco contribution Based on the supply of products cpa 25-33 (refer to ecocontribution legislation) ''who supplies these type of product pays the tax'' Pollution Taxes Waste disposal at sea The following steps were taken to determine supply by user; (a) local production was already allocated by industry; (b) imports is registered as a total in the sut therefore, it was reallocated by supplier using data on imports of goods by nace; trade margins were allocated using the overall margin rate; (d) net taxes were allocated using the overall net tax rate Based on the construction activities by industry; supply of cpa 45 Resource Taxes Oil rental licences Based on the supply of cpa 11 Energy Taxes contains allocation of: Petroleum Based on the use of CPA 23 in 2004 Excise levies petroleum Based on the use of CPA 23 in 2004 Excise levies electricity Based on the use of CPA 40 in 2004 7
Appendix B 8
9