Retailers wary of single

Jul 08, 2023

Local retailers are seeking clarification on the planned imposition of taxes on single-use plastic on fears such move could only trigger increases in prices of consumer products.

Philippine Retailers Association (PRA) President Roberto S. Claudio Sr. told reporters at the National Retail Conference and Stores Asia Expo (NRCE) 2023 held recently that while taxing single-use plastic is a good environmental direction, there are issues that need to be clarified. President Marcos in his last State of the Nation Address mentioned taxing single-use plastic.

First, Claudio said there is a need to classify plastic products because there are plastic items that are 30 percent and 50 percent degradable. “What is single-use plastic,” he said.

“We need more clarity and they need to define more what plastic means, what is single-use plastic,” he said.

For instance, he said, single-use could mean container used in the wet market and thrown after, but if it is washed and reused, it is no longer single-use plastic and therefore no longer taxable.

“There will be confusion in the implementation,” he said adding that they understand the idea that the aim is to ensure less packaging, less plastic, and less garbage. Other plastic products can also be recycled, he noted.

Retailers are wary of this new move of the government because they expect to bear the brunt of this environmental cleanup. “Since we are the retailers, we are the ones packaging the items,” he said.

But what worries them is that the taxes imposed will eventually be passed on to consumers. This would mean higher prices.

Retailers, however, have been encouraging customers to bring their own reusable bags when they shop.

“We will define the single use plastic properly to avoid confusion, but the idea of reducing plastic, yes we support that. Exactly how and who should shoulder the cost, that is the question,” he added.

On Nov. 14, 2022, the lower House approved on third reading House Bill 4102 or House Bill (HB) 4102 or the Single-use Plastic Bags Tax Act as the country’s contribution to the global movement to reduce pollution. The bill was transmitted to the Senate on Nov. 15, 2022.

The bill seeks to impose an excise tax of P100 on every kilogram of single-use plastics removed from the place of production or released from custody of the Bureau of Customs.

The price of a pack of labo bags is estimated to increase by around 75 percent during the first year of implementation, with an estimated decline in volume by around 24.7 percent.

While the retail price of sando bags will increase by 79.3 percent, which is expected to result in a 26.1-percent decline in volume.

The proposed excise tax will increase yearly by four percent beginning 2026, and incremental revenues collected will be allocated to the Department of Natural Resources' programs for the implementation of Republic Act 9003.

A 70 percent assumption in collection efficiency will translate to estimated revenues of P38.06 billion for five years, or 2023 to 2027, of implementation.

If passed into law, the bill will address the long-standing issue of plastic waste management by promoting the use of recyclable packaging, and ending the “throw-away culture”.

Studies have shown that market-based instruments, such as taxes aimed at discouraging the use of single-use plastics, have proven to be effective in curtailing plastic waste generation.

In the ASEAN region, Brunei and Vietnam have already imposed taxes on single-use plastic bags. As a result, Vietnam saw a 23 percent reduction in daily plastic consumption—from 746 tons a day in 2014 to 577 tons in 2017.

Meanwhile, Washington DC, San Francisco, and Seattle significantly curbed plastic consumption by 85 percent, 72 percent, and 78 percent, respectively as a result of taxing single-use plastics.

According to the World Bank, the Philippines, China, Indonesia, Thailand, and Vietnam account for 55 percent to 60 percent of plastic wastes entering the oceans.