GOVPH

• The House Committee on Ways and Means of the 18th Congress recently approved an unnumbered substitute bill to House Bill No. 178 imposing excise tax on plastic bags. The Committee has yet to file the Committee Report for the same. The bill encourages producers, as well as consumers, to shift to more environment-friendly alternatives to plastic bags.  Moreover, it intends to generate additional revenues for the government which could be used for programs and projects on Solid Waste Management in the Philippines. 

• In the Philippines, a number of regulatory measures have been applied both at the national and local levels to address the issue of plastic waste.  Specifically, Republic Act (RA) No. 9003 otherwise known as the “Ecological Solid Waste Management Act of 2000” mandates local government units (LGUs) to formulate 10-year solid waste management plans and to set guidelines for reusing, recycling, and composting of wastes generated within their areas of jurisdiction. Yet, its implementation remains a struggle, given the gaps--both financial and administrative--in solid waste management.  Apart from RA 9003, there is no other law that specifically regulates the use of plastic bags at the national level. Although some LGUs have issued ordinances banning or regulating plastic bags use, their results depend on implementation. More so, under RA 9003 and its implementing rules and regulations, plastics are categorized as “recyclable materials.” However, most plastics are non-recyclable which resulted in high volume of residual wastes. Only around 9% of discarded plastic have so far been recycled, the rest are either burned, landfilled, or released into the environment.

• Despite existing regulatory policies, plastic pollution still remains a huge challenge. Both globally and nationally, plastic pollution poses economic, environment, and social costs. Evidence shows that regulatory policies in different countries, and even in the LGUs, have not been effective or have less impact in reducing plastic consumption due to several factors and challenges (such as poor enforcement of the law, strong public resistance, problems in solid waste management, and lack of infrastructure). Hence, countries are looking at taxation in order to trigger a change in behavior and to shift the burden to the polluters. The two predominant approaches are: tax imposed on production and import, and levy or fee charged to consumers.

• In consideration of the proposed “Plastic Bags Tax”, lessons from other countries provide a guidepost in the design of the tax provisions.  Accordingly, an effective tax rate should be set to ensure that the desired objective would be met. In this case, a sufficiently high levy is necessary to trigger a change in producer or consumer behavior to reduce plastic bag consumption.  Among the key findings of the proposed tax features are: 1) the thickness of the plastic bag should be carefully considered to ensure fairness; 2) the material content should be determined as there are some bags with biodegradable content, and this would entail different tax treatment; and3) widening the tax base to cover other plastic products should be considered in the future. It is also important to consider the tax incidence and plastic tax may be imposed at the different stages of the plastic chain so as to trigger change in behavior. Other measures would almost certainly be needed alongside any tax on plastic (i.e. other regulatory measures or economic measures, such as Extended Producer Responsibility, i.e. product-take back schemes, deposit-refund, and waste collection and takeback guarantees).  Authorities may also introduce financial incentives to change the behavior of consumers, retailers, and manufacturers to use alternative products which are both economical and environment-friendly. Extensive consultation and awareness campaign are also significant to ensure public support. As with any tax, it is important that it should be targeted, effective, fair, and administratively feasible. The plastic bag tax should not primarily aim at raising revenue but rather on how to change the behavior (both producers and consumers) so as to achieve the intended environmental purpose.