Environmental taxes: who pays, who pollutes, or who can pollute? | Legal

Environmental taxation is permanent and a proven fact. To the already existing environmental taxes, two more taxes will be added on 1 January 2023, sourced in Law 7/2022 of 8 April on waste and contaminated soil for a circular economy. These are the special tax on non-reusable plastic containers and the tax on landfills and incineration of waste. Both taxes aim to prevent waste and improve its management, thereby promoting the implementation of the waste hierarchy contained in the law in question.

The former seeks to prevent waste generation by taxing the use of containers containing non-reusable plastics, while the latter aims to support diverting waste towards less environmentally harmful options such as recycling or recycling. recovery.

These two taxes, which will come into effect on January 1, 2023, will not be the last environmental taxes aimed at reducing environmental pollution.

According to experts and different economic institutions, this type of tax will contribute to both the fight against climate change and the acquisition of public revenues to mitigate the effects of the said change. The White Paper on Tax Reform, commissioned by the Ministry of Finance, devotes a whole chapter to environmental taxation, and in particular to transport, agriculture, livestock or water resources, which will be the target areas that will be most affected.

Aside from proposals today that fit the need to comply with commitments to reduce polluting activities and consumption through the polluter-pays-only principle, another question is to determine whether the social, economic and political context is sufficient to achieve them. approve and, finally, assess whether these taxes are indeed compatible with the polluter pays principle or, conversely, whether their effects are more closely linked to the polluter pays fact.

The tax on non-reusable plastic packaging is a clear example. The wording of the law portrays non-reusable plastic container manufacturers as passive subjects, but the reality is very different and affects a wide variety of industries. Let’s consider food, for example, a company that, besides production, buys products packaged in plastic bags or boxes in Argentina, or products in single-dose containers in Germany. Like plastic manufacturers, they are taxpayers who, in addition to complying with the tax assessment, will be subject to some official obligations and will incur expenses that will make the product more expensive.

And with this data, do we really think that this tax and administration costs will not be reflected in the distribution chain? In the production of non-reusable packaging, we must add to the tax burden of 0.45 Euro / kilo of plastic, the management of the accounting of the used plastic, the accreditation of the use of recycling, this, new accounting or billing obligations. tax management of defective products, accreditation of manufacture of non-subject products, export, etc. its real effect, which will make the product more expensive and will sooner or later pass on to the consumer.

In our opinion, these tax proposals, which aim to discourage polluting activities and consumption in principle and to encourage circular economy at the expense of linear economy, do not always achieve their purpose. The food company in the example will continue to manufacture and market its product to the extent it can, and unless there are alternatives, it will pass on taxes and related costs to the final consumer, as in other environmental incidents. taxes.

The polluter pays principle is an axiom that is true only if there are substitute or alternative services or products, and when it doesn’t, it reinforces the opposite effect of whoever can pay, pollute. Whether the revenue from these taxes will be allocated to combating climate change, or whether they will make changes that contribute to the transformation of companies and reduce emissions through aid and subsidies for R&D+i, or simply that they will contribute to the increase of public revenues and that are unrelated to the aim to be achieved. if they dedicate.

Julio Mendo BuetasPartner of Mendo & Callao Legal