Issue link: https://maltatoday.uberflip.com/i/744537
maltatoday, SUNDAY, 30 OCTOBER 2016 6 News MATTHEW VELLA AN 'eco-tax' that placed a respon- sibility on importers to collect the packaging waste generated from the sales of consumer goods, is placing businesses in a quandary since the Labour administration started substituting it with excise taxes. The small business chamber, GRTU, runs one of Malta's two compliance schemes, which col- lect the packaging waste for re- cycling on behalf of their paying members. Apart from GreenMT, the other scheme is the GreenPak cooperative. When introduced in 2004, the eco-contribution paid by com- panies was often pushed down- wards to the prices paid by their customers. Apart from collecting the tax, companies also had to pay to participate in the Compliance Schemes to fulfill their EPR obliga- tion – "extended producer respon- sibility". That duplication of costs was re- moved when companies in a Com- pliance Scheme were exempted, on condition that the Compli- ance Scheme also collected the recycling waste on behalf of local councils at community level: it is impossible for companies to indi- vidually collect the waste after the products are sold to consumers, which is why they pay a Compli- ance Scheme to collect the waste from the streets. But the removal of the eco-con- tribution in 2015, has now elimi- nated the need for the collection of recycling waste from local coun- cils. "There exists a real risk that re- cycling at the community level – both the collection of the green and grey bags from households as well as the waste from bring-in sites – will break down, as there is no instrument to tie Compliance Schemes to providing services to the community. Who will then step in to provide the service?" GreenPak chief executive Mario Schembri told MaltaToday. Apart from fears of a stunted recycling waste collection, the GRTU is now on the warpath over the government's decision to claw back eco-tax revenues from higher excise taxes on consumer goods. In 2015 actual government rev- enue from the eco-contribution stood at €8.11 million, dropping to €500,000 in 2017 estimates. At the same time however it is estimated that government revenue in 2017 from excise on plastic bags, toilet- ries, non-alcoholic beverages and bottled water will be €4 million, while another €2.1 million will come from construction compo- nents and fixtures. "It is obvious that the govern- ment has grown so much accus- tomed to receiving eco-tax from businesses year on year and in- jecting it directly into its coffers, without any kind of regard for the environment, that now it is find- ing difficulty to do without it," the GRTU said this week. "So businesses will be made to comply with the EU Directives and finally their money will really go towards recycling and treatment of products they put on the market, but at the same time they have to sustain the government's depend- ence on the old environmentally- disguised tax." Indeed, Schembri points out that companies, as well as consum- ers who bear the full effect of the excise hike, now have to pay both compliance fees for the collec- tion of packaging waste… as well as excise. "Given that currently there is no instrument to ensure that Compliance Schemes finance the collection of recyclables at the consumer level, there now exists a new game-changer. The finan- cial impact of these latest excise fees on toiletries will as always be passed on to consumers." The government has substituted the eco-contribution with higher excise tax on a number of products that include toiletries, make-up, skincare and hair products, sham- poos, deodorants, personal clean- ing products, aftershave, room- deodorisers, soaps and shower gels, as well as building-related products such as pre-fabricated concrete, tile ceramics, and glass sheets. In itself, this will mean that busi- nesses that want to defer payment of excise when claiming their goods, will have to segregate the goods inside the Customs ware- house or apply for a tax warehouse – the GRTU adds, even ensuring CCTV surveillance and having the goods locked up with access through customs officials, further piling up the costs. Excise hike hitting wrong notes with businesses Government's plan to scrap eco- tax and raise excise tax instead is creating problems in waste collection 'There exists a real risk that recycling at the community level – both the collection of the green and grey bags from households and waste from bring-in sites – will break down