The Truth Behind Plastic Tax And Sugar Tax In Italy

Volume 3, Number 5: November 2019 | Op-Ed


These days in Italy, we’re discussing about new taxes that are ready to enter into force at the beginning of 2020. After cash tax, the two novelties are plastic tax and sugar tax. If I agreed with cash tax, I feel to say that I’m against these two taxes, not because of the idea behind them but because of the way they are set up. Apparently, they sound good but in reality, they are not because in this way, the plastic tax won’t help the environment and the sugar tax won’t reduce obesity and moreover especially the plastic tax will destroy the sector.

The plastic tax will add one euro in fees to every kilogram of single-use plastic packaging produced and the cost will be passed on the consumers. It aims to replace plastic with biodegradable materials for a series of disposable objects from cotton buds to food containers. If the environmental objective is sacrosanct and correct, less credible is the use of this tax to “help companies to convert from the technological point of view towards eco-sustainable plastics” as the government justified it.

Now the big question is: “In addition to plastic packaging, will for example bottles from recycled raw materials still be affected? “The answer is not clear yet but it seems that not, even if over 15% of the plastic we use is from a circular economy. If the purpose was to help the environment should be better to encourage the technological development of substitutes to find a solution as biodegradable packaging or recycling facilities instead of taxing companies. Italy, in Europe, is the second producer of plastic after Germany. This decision would penalize Italian companies favoring foreign competitors and Italy cannot afford this, because, given his moment of crisis, it would only worsen the situation of many companies and workers.

A plastic tax will duplicate the cost of plastic for Italian companies, that will be obliged to pay the raw materials double of their competitors and this will lead to the companies bankruptcy that will lead to a higher cost for the Italian government. Are we sure that it will be so advantageous or will it be only more harmful for our country? The problem is not plastic as material but is that we should fight against uncollected, abandoned and dispersed plastic in the environment which is a problem for the Earth and humanity. Germany, for example, has reduced the amount of landfill to a minimum by maximizing recycling, and how does Italy respond?

 For what concerns sugar tax, the government said that the purpose is to reduce youthful obesity. It sounds good, the problem is that this tax is carried out completely random and in inaccurately way. In particular, in Italy will be taxed “high sugary drinks” of 10 cents per liter and also powders ( not specified yet which kind of powders ) for 25 cents per kilogram.

But are we sure that this tax will reduce the consumption of sugar and sweet product to reduce obesity, or is only an excuse to make cash taking advantage of a good excuse? Italy is the first country in Europe for juvenile obesity, that’s why should be important to reduce sugar consumption, but to hit people’s health it should have a very high rate and above all, there should be a different rate between different level of sugar contained in the drink ( based on UK sugar tax model). Moreover, drink industries should have time to change their production to offers products with lower levels of sugar. In fact, in the UK the experiment worked: consumes are reduced and sugar contained in beverages is reduced. Set up in this way, the Italian sugar tax will have repercussions for more than 10 thousand workers. A lot of countries adopted sugar tax as France, UK, Hungary, Mexico, Portugal.

The key point is education. The government should educate people to reduce sugar consumption, making them aware of the health risks. We should increase food education in school and we should try to find good healthy alternatives. Everyone should arrive to be aware of avoiding unhealthy products. There are solutions but they are more difficult, for the Italian government it’s easier to pass the problem on the companies and consumers by taxation.

These taxes are just strategies to make cash without a real industry strategy behind and without real growth planning of the country.These taxes are just strategies to make cash without a real industry strategy behind and without real growth planning of the country.

http://www.ilgiornale.it/news/economia/tassa-sulla-plastica-i-prodotti-colpiti-e-esclusi-1777898.html

https://www.reuters.com/article/us-italy-budget-plastic/italy-to-tax-plastic-and-sugar-angering-producers-idUSKBN1X71XF

https://www.lagazzettadelserchio.it/notizie-brevi/2019/10/tassa-sulla-plastica-le-reazioni-delle-imprese-di-confindustria-toscana-nord/

https://www.ilgiornaledivicenza.it/home/economia/la-tassa-sulla-plastica-distrugge-tutto-il-settore-1.7733109

4 comments

  1. I agree with the author that the tax on sugar might not help much with the reduction in sugar consumption as sugar is pretty addictive. A little rise in price would not discourage consumers much. However, for the tax on plastic, I think that it could help. If the market is competitive enough, the producers will be the ones taking on the increase in cost. As a result, they are likely to turn to alternative, greener materials, for production. Nevertheless, the author mentioned that the companies could go bankrupt if they had to bear all the costs. From this, I believe that it would create incentives for them to develop a more efficient and greener method which can help reduce the costs of production.

    On the other hand, if the market was not that competitive, meaning that the companies could pass on the costs to the consumers, I believe that it would yield a similar outcome. Accompanied by global warming problems, buyers might be discouraged to buy goods with lots of plastic. As a result, they might turn to other companies for greener products. The taxed company thus has to also change their production method to get their customers back.

    What if the government does both the tax on plastic and the subsidy on the alternatives? Will it lead to a better solution?

  2. I do agree with the author that plastic tax and sugar tax are the strategies for the government to generate revenue. As plastic tax penalizes products, not behavior, and only placing huge costs on consumers. In my opinion, the technological development of substitutes is important, but we should also reduce the use of single-use plastic and tax should be raised in the plastic packaging waste. As we all know that plastic pollution is a huge problem. However, replacing plastic with other materials isn’t always the best solution, as all materials have an environmental impact such as pushing up energy use and carbon emissions. For sugar tax, many just loves the taste and do not want to switch to diet versions, even though they have to pay higher. As changing behavior is really difficult and strong preferences mean the price responsiveness is likely to be lower. In the end, the government needs to work harder to educate people to consume less sugar in order to reduce obesity effectively.

  3. Using plastic tax would hurt country like Italy, where it is the second largest producer of plastic. This would worsen its economy as a whole from employees to executive workers. If these companies bankrupt, all the burden would be on many organizations including its own government. Although plastic tax provides revenue for the government and are likely to decrease the use of plastic, the damages it has is still outweigh the benefits. Moreover, most people will find it difficult to stop using plastic as its usage is involved in our daily lives such as plastic bags on supermarket or water bottles.

    I find it hard to successfully reduce sugar consumption by implementing sugar tax. It could work, theoretically, but changing habits of majority of people requires more than just adding price to certain products. Besides, big companies like Coke and Pepsi are not going to agree: they will not change their formula to avoid tax but if they do, they will lose huge amounts of revenue. I would say the government should shift the focus to educating people to deeply know the consequences about obesity. It could implement health programs preventing these related diseases like the one in Cuba.

  4. I do agree about the strategies for the government to generate revenue and if this is implemented in Thailand, there would obviously be a big corruption now. However, imposing tax on sugar and plastic would hurt the beverage company and also others that used sugar and plastic as a main ingredient. Also, company that produce plastic are a lot in the world. This would cost a big problem to workers in those company and may lead to cost push inflation if imposed big tax on the supplier , and also lead to a drop in sales revenue as consumer face a higher cost. So how could the government handle this? I suggest government should encourage new production and new lifestyle such as sugar-free sugar/syrup or biodegradable materials to the market. This. may take time. but no there are some brand that produce their sugar free syrup and sweets, and biodegradable bottle and . And once the company started to change their production, imposing tax on sugar and plastic would not hardly hurt the economy.

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