Trade rejects excise obligation on plastic baggage – Manila Bulletin

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Industry rejects excise duty on plastic bags - Manila Bulletin

The domestic plastics industry has spoken out against a bill that would impose a P20 excise tax on every kilo of plastic bags removed from customs territory or from a factory, and calls for a win-win solution that protects jobs and local production .

In a statement, the Philippine Plastics Industry Association (PPIA) cited the various points against House Law No. 9171 that will severely affect many industries and the wider economy.

PPIA President Danny Ngo called for an economic impact assessment before the law was passed, as many industries will be severely affected and the overall economy will also lead to higher product costs.

Photo credit: http://www.philippineplastic.com/index.html

Ngo pointed out that the forecast revenue from the consumption tax collection of P4.867 billion cannot be guaranteed because the business of the local producers concerned is no longer profitable after the law is passed.

Instead, PPIA has called for win-win solutions such as recycling without endangering industry, society and the economy.

Ngo referred to a World Bank study in the Asia-Pacific region that showed plastic can be a potential source of income.

The World Bank’s Asia-Pacific study team said in its results released last March that the Philippine economy is losing up to $ 890 million a year due to the untapped potential of plastic waste converted for recycling for a circular economy. The study shows that in 2019 only 28 percent of the most important plastics will be recycled back into resins. When fully used, the total material value could be $ 1.1 billion, or about 55 billion pesos.

“This is 11 times the estimated tax revenue from this proposed measure of $ 4.867 billion.

“So it is important that lawmakers pass laws that strengthen and improve plastic recycling rather than taxing or banning our product,” added Ngo.

Ngo pointed out that the proposed law covers not only plastic manufacturers and distributors, but all industrial users of plastic bags as primary and secondary packaging, such as processed or frozen food, hygiene and health care, medical and pharmaceutical products, and all agricultural products agro-industrial raw materials, including products for export, also as the safest, stronger and most hygienic material for transporting goods.

All domestic retail and micro-businesses that use plastic bags and all consumers will bear the higher costs.

“This does not spare even the smallest stores such as 1.3 million sari-sari stores, which are mostly located in the impoverished areas,” said PPIA.

The group is also alarmed that this move would seriously affect the informal sector such as sellers. The International Labor Organization (ILO) found in 2013 that the Philippine informal economy, including micro traders, accounts for 72.5 percent of employment in the Philippines. Everyday street and “talipapa” items are bought by consumers at low prices, and as many who make a living from it would attest it is “isang kahig, isang tuka,” as the Filipino idiom says. It’s a poor man’s bag. So why tax?

Ngo also said the bill could not justify and articulate why plastic bags with an excise tax are weeded out. The Congress of Associated Unions and Unions of the Philippines supports local plastics manufacturers as they believe the law will kill the industry and cut jobs.

“This is paradoxical as unemployed Filipinos rise to 4.14 million due to lockdowns as the country’s national unemployment rate fell to 8.7% in April this year,” he said.

In the same press release, the Association of Filipino Industries called the measure “discriminatory”. The Federation asked, “Why should we discard plastic bags for excise duty when carrier bags could also be potential waste items? If the spirit of this bill is based on the premise that it will significantly reduce waste, then it is indeed discriminatory. The PPIA president said they were one with the government when it came to saving the environment. “The plastics industry has been recycling plastic waste for more than four decades, but has not been able to fully achieve its goals due to gaps in the value chain. The industry cannot do this on its own, it needs the support and cooperation of government, NGOs and consumers, ”he concluded.

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