Chamber of Commerce accuses government of ‘taxing everyday life’

The Chamber of Commerce has lambasted the government for replacing eco contribution tax with excise duties on certain products in its Budget for 2017, accusing it of “imposing a tax on everyday life”.

The government last year replaced eco-contribution tax with excise duties on mineral water, non-alcoholic drinks and plastic bags, and will now extend it to perfumes, make-up, shampoo, soap, shower gels and personal hygiene products. 

However, the Chamber noted that companies used to be exempt from paying eco-contribution if they participated in a waste management scheme. With this new measure, companies must now pay the excise duty as well as the fee for the waste management scheme.

“From a socio-economic perspective, this is tantamount to a tax on everyday life on all consumers, irrespective of their income levels, who need to use these essential products daily,” the Chamber said in a statement. “Besides, this measure is regressive because it is imposed as a flat rate on weight or measurement of the product so it hits low-income classes harder than their more affluent counterparts. Excise duties, by their very nature, tend to be more inflationary because these are payable upon importation so therefore the tax has a high impact at a retail price level. Moreover, excise duties cannot be recovered on products which are not sold.

“Eco contribution, on the other hand, had a neutral effect on consumer prices because companies that participated in a waste management scheme were exempted from the tax. This measure is therefore equally taxing on the waste management schemes and on the environment itself.”

The Chamber also warned that excise duties will grant added powers to the authorities, which could be used selectively on responsible companies – “thereby inflicting undue administrative burdens whilst allowing those who abuse to go about their ‘business’ unpunished”.

“Due to such ineffective enforcement in the country, the measure will render abuse in free movement of goods all the more attractive,” it said. “This will continue to intensify the hardship on responsible businesses, penalizing them further for their commitment towards honouring their fiscal and environmental obligations towards the consumer and the country in general.”