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Monday, July 15, 2024

DOF eyes new tax on single-use plastic bags

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The Department of Finance (DOF) is pushing a new levy on single-use plastic bags (SUPs) to address plastic pollution and promote sustainable practices, while generating revenue for environmental programs.

It proposed a weight-based rate for easier and fairer tax administration with an excise tax of P100 per kilogram on SUP bags, with a 4-percent annual indexation beginning the third year of implementation.

“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 said.

The agency said that compared to other countries, the Philippines has one of the cheapest tax rates per bag at P0.40 —a stark contrast from the United Kingdom’s P326 per bag, Ireland’s P12, Virginia, USA’s P3 and Denmark’s P1.

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 P0.47 to P0.82, while sando bags will be priced at P0.51 to P0.91 each.

The DOF expects the government to raise P31.52 billion in revenues from 2025 to 2028, which it said should be earmarked for the Department of Environment and Natural Resources (DENR)’s solid waste management program in municipalities.

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, it said.

Data from the World Bank showed that the Philippines is the third largest contributor of mismanaged plastic entering the ocean each year with 750,000 metric tons.

Plastics are found to emit greenhouse gasses (GHG) throughout their lifecycle–from production to end of life.

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, the DOF said.

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