NEWS | Wednesday, 07 January 2009

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Ireland has taxed plastic bags to near extinction. Why shouldn’t a similar tax not work in Malta?

James Debono
The government’s failed objective of eliminating the plastic bag, by means of an eco-tax introduced back in 2004, may only be reached if it goes for the Irish model of a 15c tax on any plastic bag bought from a retail outlet.
Ireland passed its tax on plastic bags in 2002, coupled with an aggressive awareness campaign. Today the tax has increased to 22c per bag at the register, and the use of plastic bags has dropped a staggering 94%.
Within a year, nearly everyone had bought reusable cloth bags, keeping them in offices and in the backs of cars. Plastic bags may have not been outlawed, but carrying them became socially unacceptable — on a par with wearing a fur coat or not cleaning up after one’s dog.
In 2007 Ireland decided to increase the tax from 15c to 22c, with plastic bag usage falling to as low as 21 per head, compared to 328 before the tax. The number crept up to 30 in 2006, prompting the tax rise.
Ireland has raised €75 million from the tax since 2002, in an attempt to reduce litter from the 1.2 billion bags given to Irish shoppers each year and improve the country’s environmental record. The tax finances environmental enforcement and cleanup programmes.

War on plastic
Malta introduced an eco-tax on plastic bags in 2004 but the measure failed because shop owners continued giving plastic bags for free to consumers.
As in Ireland, shop owners will now have to register any plastic bag given to consumers on which the 15c tax will be imposed.
The availability of a sustainable alternative to plastic bags should be a paramount consideration when introducing the new tax.
Since eco taxes are not meant for revenue generation but to change behaviour, the free distribution of canvas bags to consumers would give consumers an alternative.
The 15c tax, which comes into force in February, has been criticized for not differentiating between degradable and conventional plastics. The eco tax it replaces, on the other hand, taxes plastics according to their associated environmental burden.
According to the previous regime, biodegradable bags made entirely of organic material were tax-free. On the other hand, polythene bags incurred a 6c tax, while degradable bags incurred a 1c tax.
The admission by government officials that enforcing the 2004 regime verged on the impossible because some suppliers were even marketing bags as degradable products even when they had a very low percentage of degradability, is an admission of failure.
This admission is very damning on the way the eco contribution was introduced in 2004 without sufficient consultation and studies.
One of the major problems facing the authorities is the false labelling of plastic bags as being degradable or biodegradable. The VAT department was responsible for enforcement in this sector. Importers and producers of plastics were obliged to inform the authorities about the material used in the making of the bags.
Having provided this proof, the VAT Department may then request the Malta Standards Authority to verify the certification. This system turned out to be cumbersome and very difficult to enforce.
One could argue that degradable plastic bags should not be penalised as much as conventional plastic bags. But this depends on the government’s ability to enforce standards.
Although degradable plastic bags are less harmful, principally because they occupy less space in a landfill as they degrade faster, canvas bags are deemed to be the best alternative.
Short of banning plastic bags altogether – something which is not allowed by EU legislation – a simple and enforceable tax regime is simply the best option in a country where everyone tries to find a loophole to avoid the tax.
One major pitfall of the new tax could be that it could induce consumers to re-use conventional plastic bags on which they will start paying a 15 cents tax as bin liners instead of buying degradable black bags.
Ultimately the success of fiscal measures depends on a change consumer mentality and the availability of canvas bags as an alternative.
Otherwise affluent consumers who can afford to pay for the convenience offered by the plastic bag will continue using them.
Otherwise the only people who will stop using the plastic bag will be low income groups.

jdebono@mediatoday.com.mt

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