Plastic tax: the tax, suspended due to Covid, will come into effect in January 2021.

The tax on non-recycled plastic packaging could reach up to 80 cents per kilogram. Opposition groups argue that this is a cash-grab that will harm the supply chain, while the government sees it as an essential measure to reduce environmental impact. Here's what it's all about.

PLASTIC TAX

"The plastic tax will start on January 1, 2021. We suspended it due to the Covid emergency, but I can confirm that it will come into force next year." This was stated by Environment Minister Sergio Costa , who denied rumors of a possible scrapping of the measure. Included in the draft law "State Budget for the 2020 financial year," the tax has been heavily contested by the opposition, who accuse the government of imposing a new tax simply to raise the funds needed to finance the economic recovery. Furthermore, according to critics, the measure will severely damage a supply chain that is among the most productive in Italy: 11,000 companies operate in the sector, with 110,000 employees, which generate approximately € 30 billion in revenue each year.

PLASTIC TAX

The government obviously defends the measure, and Legambiente calls it a sacrosanct rule , albeit one with room for improvement. The government's decision is part of a European context: the European Union has been studying measures for years to curb the spread of plastic products , specifically those most harmful to the environment . For this reason, the tax that will come into force in January will be a fully-fledged European plastic tax, calculated based on the weight of waste and amounting to €0,80 per kilogram.

READ ALSO: How to Eliminate Plastic in Three Steps. All the Items We Can Replace

WHAT THE PLASTIC TAX PROVIDES FOR

The measure, as stated in the conclusions of the European summit on Next Generation EU and the 2021-2027 budget in July, will also serve to finance the significant outlay planned for the Recovery Fund : "As a first step, a new own resource based on non-recycled plastic waste will be introduced, which will apply from 1 January 2021." Italy will receive €209 billion from the extraordinary plan approved by the Council, which must be ratified by the European Parliament, an amount higher than the €172,7 billion in the Commission's original plan. However, only the share of financing has increased (from €91 to €127), while the share of non-repayable grants remains unchanged.

Once it enters into force, the tax will include a regressive mechanism to prevent the burden from becoming too burdensome for lower income groups. What seems inevitable, however, is that it will have a strong impact on final consumption, with an inevitable increase in packaging prices , which, due to market rules, will tend to be less widespread.

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