Tax withdrawal on polythene leaves govt environment plans in limbo

Highlights:

• DoE plans to reduce 30% plastic waste by 2030
• Budget proposes withdrawing 5% tax on plastic, polythene bags
• Government officials concerned keeping mum
• Experts think withdrawing duty would encourage more plastic consumption

Business interests over the environment? This is how some quarters are perceiving the budget proposal to withdraw supplementary duty on all types of polythene and plastic bags, which coincides with, and contradicts, the Department of Environment's plans to reduce plastic waste by 30% within a decade.

The Bangladesh Nature Conservation Alliance (BNCA), an alliance of 33 environmental organisations, thinks the proposal to withdraw the 5% supplementary duty conflicts with the government's own national action plan against plastic.

The Department of Environment (DoE) chalked out short-, mid and long-term action plans for sustainable plastic management, include the introduction of a buyback or depositing refund scheme, scaling up charge setting for plastic that have viable alternatives and most importantly the imposition of higher tax and value-added tax on single-use plastic (SUP) items like bottles.

Finance Minister AHM Mustafa Kamal, however, in the 2022-23 budget proposal, said the withdrawal of tax, including on oven plastic bags and wrapping materials made of polyethylene, would make the business environment friendlier and reduce tax burden at the local manufacturing level.

The BNCA, in a statement on Tuesday, said if the proposal is implemented, the price of polythene bags, which are very harmful to the environment, will come down, increasing its usage and thus causing more environmental pollution.

"We are in favour of imposing all kinds of taxes to reduce the use of plastic and polythene. However, the Ministry of Environment will officially talk about the proposal made in the budget, "said Razinara Begum, director (Waste and Chemicals Management), DoE.

"We are working with the concerned ministries and other stakeholders to implement the action plan we have taken to reduce the use of single use plastics and increase plastic recycling," she told The Business Standard.

She said a letter will be sent to the industry ministry soon to take initiative on plastic recycling.
"At the same time, we will write to the NBR to impose more tax," she added.

Professor Dr Ahmad Kamruzzaman Majumder, convener, BNCA and director, Center for Atmospheric Pollution Studies (CAPS), said, "Polythene is an non-biodegradable product which is having a serious impact on the environment of the country. Bangladesh enacted a law in 2002 banning the use of polythene bags. But this time the proposed budget seems to be encouraging the use of polythene and plastic.

"Plastic traders have convinced the finance department to withdraw the tariff, whereas it needed to be increased further," he said.

He added that the policymakers at the finance and environment ministries lacked coordination.
A 5% supplementary duty has been imposed on all forms of polythene and plastic bags since the 2018-19 fiscal.

Former finance minister AMA Muhith had proposed the duty to boost the use of jute bags and protect the environment.

Contacted, Habibun Nahar, deputy minister, Ministry of Environment, Forest and Climate Change, refused to talk on the matter and suggested talking with Minister of Environment Md Shahab Uddin.

Despite repeated attempts, the minister's phone was found switched off.

Dr Farhina Ahmed, secretary of the environment ministry, did not respond to any calls or texts.

Saber Hossain Chowdhury, chairman, parliamentary standing committee on environment ministry told TBS, "We have advised the Ministry of Environment, Forest and CC to take this up with the finance ministry as such a proposal undermines and is contrary to our efforts to reduce pollution. I  also mentioned the issue in my speech on Tuesday in parliament".

The DoE, with support of the World Bank, formulated an action plan last year titled "Towards a Multisectoral Action Plan for Sustainable Plastic Management in Bangladesh" to achieve the short, mid and long-term targets of sustainable plastic management set for 2022-23, 2024-26 and 2027-30.  

The plan aims at reducing 30% plastic waste, recycling 80% of it and reducing virgin material consumption by 50% by 2030.

It also hopes to phase out targeted single-use plastic by 90% by 2026.

The country's annual per capita plastic consumption in urban areas tripled to 9 kilograms in 2020 from 3kg in 2005, and in Dhaka city alone the amount was 22.25kg in 2020 and 9.2kg in 2005, according to the findings of the World Bank and the DoE.

Dhaka city generates 6,464 tonnes of household garbage a day, while 10% of it is plastic waste.
At present there are more than 5,030 small, medium and large scale producers in the plastics industry across the country.

These companies are producing and marketing plastic products worth around Tk 35,000 crore annually.

According to the Bangladesh Plastic Goods Manufacturers and Exporters Association, the government receives about Tk3,500 crore in revenue from this sector.