Sunday, April 21, 2024

Department Of Finance Pushes For Excise Tax On Single-Use Plastic Bags

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Department Of Finance Pushes For Excise Tax On Single-Use Plastic Bags

3863

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The Department of Finance (DOF) said the proposed excise tax on single-use plastic bags (SUPs) will not only generate more than PHP31 billion in estimated revenue but will also help address climate change.

In a statement on Monday, the DOF said it is proposing a weight-based rate for easier and fairer tax administration wherein a PHP100-per-kilogram excise tax on SUP bags will be imposed with a 4-percent annual indexation beginning the third year of implementation.

The proposal covers SUP bags that are not recyclable, such as “ice,” “labo,” or ”sando” bag with or without handles.

Under the DOF’s proposal, the price of “labo” bags per piece will slightly increase from PHP0.47 cents to PHP0.82, while “sando” bags will be priced at PHP0.51 to PHP0.91 each.

The PHP31.52-billion estimated revenues to be generated from 2025 to 2028 shall be earmarked for the Department of Environment and Natural Resources’ solid waste management program in municipalities.

The DOF said the proposed measure seeks to curb the high volume of mismanaged plastics in the country and serves as the Philippines’ contribution to the global movement of reducing pollution and adopting more sustainable practices while raising revenues to spur economic growth.

According to the DOF, the Philippines has one of the cheapest tax rates per bag at PHP0.40 —a contrast from Ireland’s PHP12; Virginia, USA’s PHP3; and Denmark’s PHP1.

The World Bank also identified the Philippines as the third largest contributor of mismanaged plastic entering the ocean each year with 750,000 metric tons.

Plastics are found to emit greenhouse gases throughout their lifecycle–from production to end of life.

The DOF said the country’s vulnerability to climate change puts it at risk of losing 13.6 percent of its economic output by 2040 if not addressed.

“It is the government’s duty to raise awareness on the impact of non-recyclable plastics and the irreversible effects of climate change. I believe this is where strong policy intervention is needed,” Finance Secretary Ralph Recto said.

“This is a low-hanging fruit that has been on the table for more than a decade. I am confident that our legislators will support this measure,” he added.

The DOF’s proposal was presented by DOF Fiscal Policy and Monitoring Group Officer-in-Charge Undersecretary Karlo Fermin Adriano to industry stakeholders last March 6.

“When a good has some negative externalities, meaning the consumption or use of a product causes some social cost, we try to regulate that through taxation. In the case of single-use plastic, the social cost is mismanaged waste, which is related to climate change,” said Adriano.

The stakeholder briefing was participated by representatives from the Philippine Alliance for Recycling and Materials Sustainability; Philippine Business for Social Progress; Climate Reality Project Philippines, EcoWaste Coalition; Mother Earth Foundation; Philippine Business for Environmental Stewardship; Union Local Authorities of the Philippines; Department of Environment and Natural Resources; and Philippine Plastics Industry Association. (PNA)