Entrepreneurs Expect Answers on Planned Packaging Excise Duty
Estonian Chamber of Commerce and Industry, Estonian Food Industry Association, Estonian Traders Association and Federation of Estonian Chemical Industries sent a letter to the Ministry of Finance and Ministry of the Environment demanding answers regarding the planned packaging excise duty.
In the opinion of the business organisations, establishing of the new packaging excise duty will not fulfil the goals set in the draft act, which are said to be improving of environmental protection and finding additional sources for the state budget.
Due to the fact that in our opinions regarding the effects and fulfilment of the goals of the packaging excise duty differ to a significant extent from those of the Ministry of Finance, we requested additional information with the letter we sent. We expect answers to such questions as what is the percentage that the planned excise duty would help to decrease the quantity of packaging and why is it necessary to establish an additional excise duty in order to reliably identify the quantity of packaging placed on the market.
The Ministry of Finance has previously justified the need for the new tax with the fact that there is no possibility at the moment to efficiently identify what is the amount of packaging in circulation in Estonia and how many packaging operators there are in Estonia. However, the entrepreneurs fail to understand why is it necessary to establish an additional packaging excise duty in order to reliably identify the quantity of packaging placed on the market and how it would help to make the supervision over the packaging management carried out by businesses more efficient.
We would like that the Ministry of the Environment would provide answer to the question, which environmental impact is to be expected from establishing the packaging excise duty on placing on the market. Additionally, we wanted to know, what is the percentage that would allow the additional excise duty to decrease the quantity of packaging, provided that there is the situation of excess packing.
Furthermore, we ask that the Ministry of the Environment assess the proposal to withdraw the currently applicable packaging excise duty and replace it with another measure (for example financial penalty for failure to join the system of packaging/waste recycling/collection system). In our opinion the state has not considered alternatives and has thought of the tax as the only option.
According to the state’s data up to 30 percent of the quantity of packaging placed on the market is not declared. Due to the fact that in our opinion, the situation will become even worse after the packaging tax is implemented, we asked the Ministry of the Environment to assess, what is the effect of the additional packaging excise duty on the motivation of the businesses to under-declare or not to declare the packaging quantities at all.
From the Ministry of the Environment, we are expecting answers regarding the volume of sorting and collecting the packaging waste by type, and what is the amount of packaging waste collected by type produced by private consumers and business clients.
The answers of the ministries to the questions will help entrepreneurs in achieving a clearer picture of the background and need for the draft act.
Read the letter sent to the Ministry of Finance here.
Read the letter sent to the Ministry of the Environment here.