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INCPEN slams Irish packaging tax proposal

By Rory Harrington , 08-Jul-2011

Proposals by the Irish Government to introduce a packaging tax would harm businesses and hit low-income consumers, said the UK’s Industry Council for Packaging and the Environment (INCPEN).

The trade association warned Ireland’s plan for a levy on packaging would put the national packaging industry at a “severe competitive disadvantage”, amount to a double taxation and fail in its aim to reduce waste.

The body was responding to proposals recently unveiled by Dublin as part of a bid to both cut waste and boost tax revenues to shore up the economy that had to be bailed out by the International Monetary Fund following the global recession in 2008.

Double taxation

Government advisers believe imposing the scheme could more than double tax revenues generated from packaging compared to the present arrangements.

The current Green Dot system is based on the ‘producer pays’ principle’ and takes into account the cost of collection, sorting and recycling of various packing materials. Supporters say the system encourages waste reduction as manufacturers that cut down on household packaging waste pay less in fees.

INCPEN hailed the success of the programme and said that in 2009 Green Dot fees handed over by Irish companies in the packaging supply chain raised recycling rates to almost 65 per cent – the sixth highest in Europe.

“The Irish government coalition partners suggested in their manifestos that the tax could raise €60-80m a year,” body director Jane Bickerstaffe. “This would generate much less than 2 per cent of the revenue needed and the costs for the Irish economy would be considerable.

Most expensive packaging in Europe

INCPEN said the inequitable proposal would impact more heavily on poorer citizens and in effect be a double tax on packaging players.

Bickerstaffe added: “The suggestion that a tax could be based on a 1999 Danish tax overlooks the fact that their tax is instead of the Green Dot system, not additional to it. Combining a tax with the Green Dot fee would make Irish packaging the most expensive in Europe.”

The industry body said it would also lead to consumers crossing the border to Northern Ireland for their regular shopping in an effort to avoid higher retail prices that the tax is likely to lead to.

The Irish Government has launched a consultation exercise and asked for comments on the following:

  • Stakeholders’ overall views on Packaging Levy
  • How a Packaging Levy might be operated
  • International experiences of similar levies
  • How a Packaging Levy should be structured in order to contribute towards a reduction in packaging

 

The deadline for responses in 5pm on 5 August, 2011 and submissions can be made via email to packaginglevy@environ.ie