Rishi Sunak, the Chancellor of the Exchequer declared during the inaugural Budget presented by the majority government that plastic packaging would be taxed from 2022. The chancellor made it known that the levy on plastic packaging with recycled ingredients below 30% will be effective from April 2022. It is expected that the introduction of the new tax would go a long way in encouraging the uptake and use of biodegradable packaging by about 40%.
Mr Sunak announced that the proposed tax would prove instrumental in dealing with the menace of polluting plastics. The Treasury, on the other hand, proclaimed the allocation of £700,000 for bolstering the IT competencies needed to supervise the prospective ‘Extended Producer Responsibility’ packaging scheme. The chancellor also disclosed a proposal for withdrawing the tax waiver on red diesel-a highly polluting fossil fuel.
The move means that that businesses engaged in waste management and recycling will have to pay a substantial tax for using heavy equipment. Mr Sunak began his address to the House of Commons with a suite of quick-fix fiscal initiatives to grapple with the new-fangled COVID-19. Thereafter, he focussed on more wide-ranging aspects for shoring up the economy, including the adoption of measures for safeguarding the environment.
Regarding the matter of plastics taxation, the chancellor reminded the House of Commons that the proposal was made public for the first time in Budget 2018. He further said the tax would play a key role in stimulating the use of recycled plastics well as contribute towards reducing the demand for conventional plastic packaging.
After the tax proposal was first declared during Budget 2018 presentation, policymakers discussed about earlier recommendations on the appropriateness of £150 duty on every tonne of non-recyclable plastics in 2019.
Mr Sunak alleged that “From April 2022, we will charge manufacturers and importers £200 per tonne on packaging made of less than 30% recycled plastic”.