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21 November 2023
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GRTU is putting together its proposals for the replacement of the despised eco-tax – a promise made by the government in the last Budget – but there are still numerous hurdles.
The tax has to be removed by September 2015.
The issue has been delegated to the Environment Ministry, which will also have to find a way to put into force the environmental contributions Malta should be imposing through the Waste Electrical and Electronic Equipment (WEEE) Directive.
This tax will apply to everything that operates with either electricity or batteries, from white goods to toys, from sports equipment to power tools. The new system will cover hundreds of items, a considerable increase compared to the eco-tax.
The cost of the eco-tax imposed on products no longer made sense as time went on, as it did not keep abreast with technological advancements which saw IT equipment change drastically in weight, size and components. The extra cost imposed by eco-tax made Maltese businesses uncompetitive compared to purchases made abroad and from the internet, and to add insult to injury there was also no proof that the money collected was being used to take care of the environmentally-correct disposal of these goods.
It is estimated that the financial contributions imposed by the directive should be lower than those under the eco-tax regime – although the cost depends on a vast number of variables which are still being worked out. It might be more for some products: for example, it is expensive to collect refrigerant gas as well as the gas and mercury from the old-style cathode ray tube television sets and monitors.
So far, MEPA has issued a number of permits to carry out waste management related to WEEE, including to GRTU’s fully-owned subsidiary, Green MT. Those selling goods that fall under the directive have until June 2015 to join a recycling scheme or to present plans for how they intend to comply with the directive.
“We need to get moving as otherwise, Malta will not reach its recycling targets and it will be fined,” GRTU vice-president Marcel Mizzi warned.
He acknowledged that considerable numbers of items that fall under the directive were already being sold for scrap – for as much as €100 for a van-load – but since this disposal method is hardly in line with the directive specifications, it cannot be registered with the European Commission.
Other countries can focus on manufacturers and very large operators and easily meet the EU set targets. In Malta, entire logistical operations will be needed and pretty much all waste must be collected if we are to reach the targets.
“It might make sense for the different operators and permit holders to pool resources to make the operation more viable and cost-effective,” GRTU CEO Abigail Mamo said.
“Discussions with the different operators are ongoing and so far all options are still being considered, including exporting the waste.”
There are a lot of questions nobody seems to have the answer to yet. For example, one of the options is for the recycler to be paid by weight while the charge will be passed on to the customer by item.
Mr Mizzi said that GRTU has a fair amount of data about what was put onto the market and how much it costs to recycle.
“Perhaps I am making it sound easier than it actually is! With packaging, it was straightforward as we had only a few categories like paper and cardboard, or glass. Can you imagine working out the recycling cost for a car? You would have to look at the cost of recycling the metal, the bumper, the windscreen and so on …”
GRTU members hope that the WEEE Directive will help them to compete, by levelling the playing field when it comes to those who currently evade eco-tax, as well as by bringing their costs into line with those of overseas suppliers.
“But the only way to ensure that small items ordered online get into the recycling channels would be to intercept them through Maltapost, which does not seem to be an option unfortunately,” he said.
Identifying items on which the WEEE has already been paid is another problem.
“A number of our members want the WEEE cost element to show on the receipts as then the customer knows what he has been charged for. And it would be much easier to identify those who are cheating.
“My personal preference would be for retailers to buy stickers showing the tax that has been paid on that item – similar to the banderols showing excise tax paid on wine – but that poses logistical problems. Could you put ugly stickers on toys or mobile phones, for example? And some goods are sold in packaging and fixing a sticker only makes sense if it is on the product directly.
“Of course, that all depends on enforcement in any case. Enforcement by the VAT Department was one thing, but now that MEPA will be in charge it will need to step up its enforcement efforts. MEPA enforcement of the Packaging Directive already leaves much to be desired.
“GRTU expects guarantees that our efforts and those of our members are matched with proper enforcement by MEPA. GRTU would gladly carry out inspections and enforcement itself, but we have no executive powers.”
Source: ‘The Business Observer’ published on 12th March
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