Reforming eco-taxation

Time for Radical Change

Malta Today reports this morning that in tomorrow’s Budget Speech Government will be proposing a reform of the Eco-Contribution Act. Malta Today further reports that the eco-contribution due on electric and electronic equipment will be discontinued. Instead, states Malta Today, Government will proceed with ensuring the implementation of the Waste from Electric and Electronic Equipment  (WEEE) Directive of the EU.

The WEEE Directive shifts responsibility for the recovery of waste from electric and electronic equipment to producers and their representatives. It is an Extended Producer Responsibility which has so far not been implemented in Malta notwithstanding various warnings  and infringement proceedings initiated by the EU Commission. It requires the  direct involvement of the private sector who will now have to assume direct responsibility for waste recovery in the WEEE stream.

The matter is dealt with extensively in AD’s Electoral Manifesto. In fact in the Environmental Chapter of AD’s 2013 Manifesto it is stated that :

“We encourage waste separation in localities. However we recognise that this is not enough. As a country we still lag behind and have failed to reach targets on packaging waste as well as waste generated by electrical and electronic equipment.

It is essential to address the operation of scrapyards. These process waste which is subject to at least three Directives of the EU, namely the WEEE Directive, the End of life Vehicles Directive and the Batteries Directive. The manner in which scrapyards have been permitted to operate signifies a total disregard of the principles and safeguards listed in the said Directives. The fact that after more than eight years of EU membership we are still discussing these issues signifies the low level of preparedness to shoulder environmental responsibilities resulting from EU adhesion.

It is essential that environmental taxation (eco-contribution) is reformed in order that it be ascertained that environmental objectives are attained. The private sector should not be penalised through double payment in order that it fulfils its responsibilities relevant to waste on which eco-contribution was due.

Environmental taxation has two objectives. Generating funds to be used by the exchequer as well as to serve as a deterrent and consequently to reduce environmental impacts. For the deterrent to be effective it is essential that when environmental taxes are proposed it be ensured that as far as possible an alternative product or service to the one being taxed which generates less impacts than the taxed product or service is available.

On the other hand we are aware that environmental taxes which are not properly designed can be regressive. That is they can have a negative social impact due to their impacting the quality of life of those with limited means. In order to ensure that the primary objective of environmental taxation would be environmental improvement AD proposes that environmental taxation should be the joint responsibility of the Ministry of the Environment and the Ministry of Finance.”

Eco-taxation can be of considerable benefit. It however needs to be properly designed. Alternattiva Demokratika looks forward to a discussion on the new proposals.