Polluter pays: Gov't plans purchase tax on plastic disposables

Disposable plastic plates and cutlery  credit: Einat Levron

Taxation will double the price of disposable plastic tableware, which Israelis use in huge quantities.

The "polluter pays" reform is underway. Minister of Finance Avigdor Liberman and Minister of Environmental Protection Tamar Zandberg are promoting a purchase tax on all plastic disposable utensils. The Ministry of Finance and the Ministry of Environmental Protection announced today that they were formulating a plan to impose a purchase tax on imports and on local production, on the basis of weight. The aim of the tax is to reduce the negative phenomenon, which is unique its scope in Israel, of the use of disposable plastic utensils, as other countries have done.

The purchase tax will be similar to that levied on cigarettes and alcoholic beverages, and will be imposed on plastic cups, plates, bowls, cutlery and drinking straws (bottles are dealt with under the Deposit Law, and packaging under the Packaging Law).

The move does not require legislation, but only an update of the duty tariff by government ordinance, and so the two ministries intend to implement it in January 2022.

The rate of the tax will be based on a study carried out by the Ministry of Environmental Protection, which examined the readiness of domestic consumers to pay for disposable plastic products and consumers' price sensitivity in relation to these products. The study found that doubling the consumer price would reduce usage by 40%.

The precise level of the tax has yet to be determined, and the matter is now under discussion with the Tax Authority, the guiding principle being to impose a tax that will double the price to the consumer.

Israel addicted to plastic

The Ministry of Environmental Protection finds that "Israel is addicted to plastic". Household use of plastic has doubled in the past decade. Household consumption of disposable plastic products amounts to 68,344 tonnes annually, which is about 7.5 kilograms per person, five times the figure for the European Union. Annual household expenditure on disposable plastic utensils is NIS 1.3 billion, and total expenditure on these items in Israel is nearly NIS 2 billion.

Household consumption in Israel represents 70-75% of total consumption of disposable plastic utensils. In Europe, the situation is almost the reverse, with 62% of consumption by enterprises and only 38% by households.

Disposable plastic utensils cause considerable environmental damage, and their negative effects on public health are clear. They quickly turn from useful items to waste that can sometimes last for thousands of years and that takes up a growing volume of landfill, raises the cost of waste disposal, and pollutes the sea, open areas and public spaces. These products also help perpetuate dependence on polluting fossil fuels, from which plastic is made.

For Zandberg, dealing with plastic pollution is a main concern. In her first speech as minister she stressed that she would act to reduce the use of environmentally damaging utensils. The Ministry of Finance was responsive to the idea, and together with her formulated the plan to double the price of plastic utensils.

"Not all at once"

The possibility was also examined of banning the use of these items outright, as has been done in many countries in Europe, and in Australia and Canada, but a Ministry of Finance source said that the extensive use of them in Israel made it impossible to make such a sharp change at one go.

"Like cigarettes and alcohol, disposable plastic is an addiction. We are drowning in disposable plastic, and we all see its problematic effects on the cleanliness of the country and on the quality of our lives," Zandberg said.

"Taxation is consistent with the principle that 'the polluter pays'. Those who choose to consume disposable utensils in large quantities will be the ones who will most significantly bear the cost of the damage. The production of disposable plastic is based on polluting fuels, and it also has a negative effect on the climate crisis. I call on everyone to switch to multi-use utensils, for the sake of our environment and our health."

Published by Globes, Israel business news - en.globes.co.il - on July 19, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Disposable plastic plates and cutlery  credit: Einat Levron
Disposable plastic plates and cutlery credit: Einat Levron
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018