NEWS | Wednesday, 07 January 2009

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The Chamber of SMEs (GRTU) yesterday said it had asked the Commissioner of Police to seek evidence from Robert Abela, director of degradable plastic bag manufacturers Traplas, over claims he made on tax evasion and contraband importation of plastic bags.
The GRTU said it strongly objected to the “irresponsible” comments made by Abela in the allegations he made against the retailing community and for the “completely erroneous misleading and unfair comments made against GRTU.”
In a statement on the new laws concerning plastic bags, the GRTU said the EU’s VAT Directive does not allow for any exemption of VAT on plastic bags, adding that retailers have no option but to charge consumers 18% VAT on top of the cost of the bag, eco-taxation, any customs duty and any margin covering retailers cost of storage and retail service.
As from February the eco-tax on all carrier plastic bags will be €15c. This means that importers and producers will levy the eco-contribution on all eco-taxable items, including plastic bags, and will have to submit returns and payment for all eco-contributions to the VAT department.
The GRTU said it was inconceivable and illogical for the Eco-Contribution Act to be changed and a separate tax authority system introduced solely for carrier plastic bags. “It is even more irrational when the aim of the 15c eco-tax on plastic bags is to effectively wipe out the demand for plastic carrier bags.”
The VAT act also imposes on retailers to itemise on the fiscal receipt separate items included in a sale. Sale of carrier plastic bags will now appear as a separate item on the cash receipt so that customers will know that they have been charged the full price of plastic bags including VAT.
It will be illegal for retailers or traders to dispense carrier plastic bags without charge even if retailers are willing to absorb the eco-tax themselves. Traders and producers who commercialise plastic bags will have to register with the Eco-Tax Authority and will be liable to account for all sales of plastic bags.
Retailers will, when demanded by the authority, submit details including invoices to prove that plastic bags have been purchased by bona-fide traders registered with the tax authority.
“These are obligations at law established after consultations between government and all registered stakeholders when eco-contribution and VAT were introduced,” the GRTU said.
The GRTU said that once the new €15c levy is enforced, retailers will sell carrier plastic bags at a price covering cost of bag, eco-tax and any customs duty (if imported from outside EU), retail service charge and VAT. Only the retail service charge will remain with the retailer, all the rest are costs most of which representing taxation.
“This is a situation not unlike the sale of cigarettes, alcohol and other high taxation items. Retailers will sell plastic carrier bags the same way they sell black garbage bags and grey bags for separated waste. From the effective date retailers will no longer distribute plastic bags for free. The only plastic bags that can be distributed feely are light weight, transparent, bags without handles used for wrapping of items such as cheeses, breads, hams, etc. These bags will not be subject to the 15c eco-tax.”
The €0.15c eco tax will apply to all other plastic bags irrespective of the quality of the plastic. “GRTU however agrees with this decision as retailers cannot be expected to distinguish between different types of plastics. GRTU supports government’s initiative to heavily curtail the use of plastic carrier bags. Retailers recognise that their dispensing of plastic bags at no charge was creating unnecessary damage to the environment and at a cost which retailers can no longer sustain. GRTU therefore requests retailers to support the new system and avoid at all costs to support and private initiative that will distort the objective of the new 15c eco-tax on plastic bags.”

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