A ‘green’ Dutch packaging tax adopted in January 2008 will force up VAT on packaged products, is ‘not sustainable’ and must be scrapped, say tax advisers.
Speaking at The Future of the Packaging Tax conference in September, hosted by The Netherlands Packaging Centre (NVC), the audit firm BDO CampsObers said the tax must be ‘withdrawn completely’ or it will add about 2% to the current 19% VAT which is paid on most items.
The basis of the tariffs is wrong, contends BDO. It depends on the amount of carbon dioxide generated per kilogramme of packaging material according to the source of energy used in its production. It does not take into account the application of the packaging material in the packaging of the product. The environmental aspects of the user phase must be considered states BDO.
Even in its simpler 2009 form the tax has led to ‘nearly insurmountable’ administrative problems because every material has a specific carbon footprint, said BDO.
Numerous different 'simplified' deals have been made between the tax office and different industry users including wine producers, paint manufacturers and Far East importers. These set the amount of packaging tax payable in relation to economic parameters such as purchasing volume, turnover or estimates based on average use in a particular sector of the economy. Whether a company should be a member of the respective organisation is subject to debate in terms of competition policies, BDO added.
The amended 2009 tax plan dropped a distinction between primary, secondary and tertiary packaging and halved the number of tariffs to eight. It also removed liability for packaging taxes from contract packers (co-packers) and placed it on producers that outsource the work to them.
National employers’ association VNO-NCW last July was reported to say the changes had made the tax “viable” but held to its belief the tax plan served no environmental purpose.
The European organisation for packaging and the environment EUROPEN has noted that national taxes that seemingly lack environmental advantages might work against the free flow of goods in the internal market which the packaging and packaging waste directive sets out to protect.
