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Maltese ELT seeks VAT exemptions
By Andrea Pérez, EL Gazette | June 2016
Source: http://www.elgazette.com/

Malta’s English language providers have called for VAT (sales tax) exemptions to make the country’s language school sector more competitive, the Malta Independent reported. The call, from the Federation of English Language Teaching Organisation of Malta (Feltom), followed the latest figures from the industry: a 2.6 per cent drop in English language students in 2015. Malta’s largest European market, Italy, saw a reduction of 2,123 students compared to 2014, and other markets such as Russia and Libya suffered due to ‘instability’.

English language schools should prepare for a ‘tough summer as the weak (pound) sterling and favourable tax rates continue in the United Kingdom’, Feltom CEO Genevieve Abela told the Independent. ‘More favourable VAT exemptions that exist in other destinations on tuition and services – as well as simplified and more efficient procedures when it comes to issuing of visas – can give the sector a much-needed competitive base.’

Malta has a competitive disadvantage with VAT applied to language travel services. In Malta students pay 7 per cent VAT on language courses and 18 per cent VAT on all ‘services’ (such as travel and accommodation), while ‘in the UK no VAT is levied, and this already makes it more competitive’, Feltom’s spokesman said.

The UK removed VAT on language school courses in the 1980s, and they are VAT-exempt in Ireland too. But travel and accommodation remain fully vatable in both Ireland and the UK – 20 per cent in the UK and 23 per cent in Ireland, where ‘hotel accommodation’ has a reduced rate of 13.5 per cent. UK homestays and student accommodation arranged by course providers on a not-for-profit basis aren’t liable for VAT either.

Malta is the seventh most popular destination for ELT students, after the US, UK, Australia, Canada, Ireland and New Zealand. In 2015 spending by ELT students in the country was €161 million – according to Deloitte, this is 9.8 per cent of total annual tourism spending in Malta, ICEF monitor reported.

The figures spell bad news for Malta but good news for other ELT destinations such as Ireland. Enrolment of ELT students in that country increased 10 per cent in 2015 and student weeks were up by 38 per cent, according to accredited language schools association Marketing English in Ireland. ICEF Monitor data has Europe as Ireland’s main market, with Italy and Spain as the top-sending countries.

(End of article)