Use of plastic money

The business community read with interest that the government has repurchased from retailers over 10 million plastic bags - contrary to three million as had been previously estimated - at a reported cost of more than €1 million. The offer was made after retailers complained that they had not been given enough time to make use of their stock before the new eco-tax regulations came into force.

At the time, the Malta Chamber had criticised the implementation of the latest tax measures on plastic bags mainly because, contrary to original government policy when bio-degradable bags were zero-rated, this time no positive discrimination was allowed between plastics of varying environmental-friendliness. Meanwhile, as the Chamber had predicted, the latest policy resulted in operators quickly switching to paper bags - which carry a lower tax but a larger carbon footprint than bio-degradable plastic.

It is a shame that the government would not heed to our economic and environmentally efficient suggestions. Instead, a precious €1 million of public money is being spent in an effort to patch-up some damage caused by the implementation of what, in our opinion, was a flawed policy decision. To add insult to injury, what the government cannot seem to find money for are the long-overdue Eco-Contribution refunds. These have been owing to eligible businesses since 2005. It does seem rather odd that refunds on plastic bags were allowed to take precedence over refunds which have far-reaching implications on the national economy.

In fact, a number of our members are owed considerable amounts of money. The delay is unnecessarily burdening the business community and is a cause for uncertainty. This uncertainty is affecting competitiveness and encouraging illegal practices to the detriment of people's jobs, consumer protection and tax revenues. The situation is inflating the cost base of law abiding firms because compliance with the relevant laws involves a double payment. Operators who opt to disregard the law get away scot free and are allowed by the authorities to compete on an unlevel playing field. The double payment arises because the Waste Packaging Directive (LN 277/2006) imposes a producer responsibility which is not automatically waived by the payment of Eco-Contribution.

All throughout, the Chamber has been assured that it was the legislator's intention to avoid such double payment. Hence, the Chamber has for many years confidently promoted legal compliance acting on the assurances provided by the various pieces of legislation and official policy papers as had been available at different times. In fact, the Eco-Contribution Act contemplates the possibility of exempting waste producers from the payment of eco-contribution if the operator (producer or importer) participates in a packaging waste recovery scheme.

A structure permitting exemptions was, however, not in place when the Act first came into force meaning that relevant operators who participated in such a scheme are now owed a refund. The payment of refunds still depends on the publication of a Legal Notice. We have been advised, since April, that the publication of this LN was imminent and we were even shown drafts on which we sent our comments. Over the past months, the Chamber had endless top-level meetings where we were assured, time and again, that the LN would soon be published. Nevertheless, much to our surprise, we were recently informed that we are nowhere near a solution.

The Malta Chamber does not appreciate being at the wrong end of empty promises. On the strength of the various assurances given by the government we have kept our members informed that they would soon receive their refunds. On behalf of the business community, our Chamber cannot accept situations whereby agreements reached with the government are not honoured. The Chamber is thus left with no choice but to ask the government to give a clear public statement as to what its intentions vis-à-vis Eco Refunds are so that the business community may act accordingly.

Given the current situation the Chamber feels that it is no longer in a position to direct its members on the way forward and it will not be held responsible for the current lack of clarity which continues to reign on the issue.

Ms Ellul is president of the Malta Chamber of Commerce, Enterprise and Industry.