Excise tax on plastic luggage impacts employees and shoppers essentially the most

Workers and consumers are expected to shoulder the brunt of a proposed P20 tax on plastic carrier bags by weight, a major union said.

Alan T. Tanjusay, spokesman and political advocate for the Associated Union-Union Congress of the Philippines, said the proposed tax, if signed into law, will encourage plastic carrier bag makers to pass on or downsize the additional cost to consumers Operations.

“If enacted as is, plastics manufacturers will either increase the cost of the plastic and pass the burden on to consumers, or stop manufacturing and downsizing,” Tanjusay said in an email to BusinessWorld on March 24th.

The House Committee on Ways and Means approved an unnumbered replacement invoice that charges a P20 excise duty per kilogram of plastic tote bags removed from the production site. The panel will be chaired by Representative Jose Ma. Clemente S. Salceda.

Mr Tanjusay said the replacement bill “did not justify and articulate why plastic bags are taxed”.

“We all feel that the bill … will kill industry and cut jobs,” he added.

The Association of the Philippine Industry (FPI) described the measure as “discriminatory”.

“Why should we single out plastic bags when carrier bags can also be potential waste and are not recyclable? If the spirit of the bill is anchored on the assumption that waste is significantly reduced, it is indeed discriminatory, ”FPI told BusinessWorld in an email on Monday.

In a separate email on March 24, the FPI said the measure was also “anti-poor” as it would encourage customers to buy other types of tote bags at higher prices.

According to the replacement bill, all excise tax revenues are used to support local government waste management programs.

An earlier version of the bill, House Bill 178, which requested a P10 excise duty on plastic carrier bags, was approved by the House Committee on Appropriations. – Angelica Y. Yang