Single-use plastics tax to generate P32B – DoF
THE imposition of higher excise taxes on single-use plastics is expected to generate some P31.52 billion over the next four years that will be earmarked for solid waste management programs, the Finance department said on Monday.
“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 in a statement.
The Finance department wants Congress to pass a law imposing a tax of P100 per kilogram on single-use plastic bags, to be raised by 4.0 percent annually starting the third year of implementations.
The Philippines currently has one of the lowest tax rates — 40 centavos per bag — compared to the equivalent of P326 in the United Kingdom, P12 in Ireland, P3 in the US state of Virginia, and P1 in Denmark, the department added.
The proposed measure is targeted at plastic bags that cannot be recycled. So-called “labo” bags will see their price go up to P0.82 from P0.47 while “sando” bags will cost P0.51 to P0.91 each.
“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,” Finance Undersecretary Karlo Fermin Adriano said.
“In the case of single-use plastic, the social cost is mismanaged waste, which is related to climate change,” he added.
The World Bank has tagged the Philippines as the third-largest contributor of mismanaged plastic that enters the ocean each year, at 750,000 metric tons.
“Plastics are found to emit greenhouse gases throughout their lifecycle — from production to end of life,” the Finance department said, adding that this puts the country at risk of losing 13.6 percent of its economic output by 2040.
The proposed tax increase, Recto said, “is a lowhanging fruit that has been on the table for more than a decade. I am confident that our legislators will support this measure.”