Excise Duty on Plastic Bags, Sacks, Cones, Films, Sheets or Tubes

Budget 2016 announced the move of plastic bags and sacks from Eco-Tax to Excise Duty. This decision was taken as part of the phasing out of the heavily criticized Eco-Contribution and the replacement with Excise.

The Customs Department Director General Joseph Chetcuti explained that the Government considers this as a more just and enforceable tax. The mechanism is also markedly different.

The process to pay Eco-Tax was instigated by the individual once the product is sold and it was heavily abused because it was easier for an individual not to declare sale of the product. With Excise the product is not released until the duties are paid.

With Excise, the point at which the tax is paid is at point of entry into the market or at point of being released from a tax warehouse. With Eco-Tax, the tax was due at point of sale.

When it comes to how the tax is calculated, Eco Tax is calculated per unit, irrespective of the size or weight. Excise is calculated by weight and there is a maximum cap as to how much one can pay. In most cases the same amount of money is due, however the law is now clearer and covers in a fairer manner bags of different sorts.

The following is a description of how the new duty has been introduced:

1. DESCRIPTION: Bags of plastic of HS Codes 3923 21 and 3923 29, for the conveyance of goods, with a handle, loop, slot or any other feature that facilitates the use of the bag for the conveyance of goods; €1,700 per 100 kgs (€17 per kg) but not less than €1,500 per 10,000 units (€0.15c per bag) 
2. DESCRIPTION: Bags of plastic of HS Codes 3923 21 and 3923 29, whether for the conveyance of goods or not, with or without a handle, loop, slot or any other feature that facilitates the use of the bag for the conveyance of goods, having a dimension of 28cm x 38cm or less and having a thickness of 15 microns or less, inclusive of gussets and handle; €15 per 100kgs (€0.15 per kg) up to a maximum of €45 per 10,000 units (€0.0045c per bag)
3. DESCRIPTION: All other plastic sacks and bags (including cones) of HS Codes 3923 21 and 3923 29 and films, sheets or tubes of plastic of HS Headings 3917 and 3920 intended for the conversion into plastic sacks and bags; but
   • excluding bags of plastic of HS Codes 3923 21 and 3923 29 and films, sheets or tubes of plastic of HS Headings 3917 and 3920 which constitute or form an integral part of the packaging in which food stuff is sealed prior to retail or transfer ; and
   • excluding bio-degradable sacks and bags in accordance with MSA EN 13432:2000, MSA EN 14046:2003. MSA EN 14047:2003 and MSA EN 14048:2003;
   • excluding printed sacks and bags of plastic of HS Codes 3923 21 and 3923 29 purchased specifically for the collection of recycled waste by the authorised waste management schemes; €250 per 100kgs (€2.50 per kg) up to a maximum of €170 per 10,000 units (€0.017c per bag)
4. DESCRIPTION: Bags of plastic of HS Codes 3923 21 and 3923 29 and films, sheets or tubes of plastic of HS Headings 3917 and 3920 which constitute or form an integral part of the packaging in which food stuff is sealed prior to retail or transfer; €0 
5. DESCRIPTION: Bio-degradable sacks and bags in accordance with MSA EN 13432:2000, MSA EN 14046:2003. MSA EN 14047:2003 and MSA EN 14048:2003; €0
6. DESCRIPTION: Printed sacks and bags of plastic of HS Codes 3923 21 and 3923 29 purchased specifically for the collection of recycled waste by the authorised waste management schemes; €0

In addition to above, a clarification was made whereby plastic bags that outers and/or wrappers used by industry as part of the packaging process shall not pay excise duty. Customs are presently working on clear guidelines to facilitate implementation.