Thursday, 22 February 2024
BusinessSuccessful collection of the plastic tax: it exceeds the expected amount two...

Successful collection of the plastic tax: it exceeds the expected amount two months before the end of the year

PSOE and Sumar agreed in their coalition government pact to address greater environmental taxation. These are taxes that seek to change behaviors that are harmful to the environment by penalizing behaviors that go against the ecological transition. During the last legislature, the Executive already took some steps by including new tax figures such as the one that taxes single-use plastic. This tribute already collects close to 500 million and has exceeded what was budgeted for this year, despite the fact that there are still two months of data left.

Often, when a new tax is introduced, revenue projections tend to be higher than reality. It has happened with the tax on banking and energy companies or with the tax on financial transactions. Figures born to raise an amount and that, in practice, show more modest results. For now, the plastic tax is pointing in another direction. It came into force on January 1 and as of October 31 it has collected 499 million euros, according to the monthly records of the Tax Agency. The 2023 General State Budgets pointed to a projection of 456 million for the entire year.

The norm defines this tax as a figure “of an indirect nature” that falls on “the use in Spanish territory of non-reusable containers that contain plastic, whether they are presented empty or if they are presented containing, protecting, manipulating, distributing and presenting merchandise.” . Although it is a somewhat complex tax, it can be summarized in that it taxes 45 euro cents for each kilo of single-use plastic.

The tax had been created a few months before its entry into force. It was done through the Law on Waste and Contaminated Soils for a Circular Economy, approved in 2022 and promoted by the Ministry of Ecological Transition. “It will be an indirect tax that will fall on the manufacturing, import or intra-community acquisition of non-reusable plastic containers that are going to be used in the Spanish market,” said the third vice president, Teresa Ribera, last year.

The tax, therefore, was part of a rule that sought to reduce the proliferation of single-use plastic with different obligations, including tax obligations. Furthermore, Ribera then recalled, it is in line with what the community directives establish and with Spain’s need to increase its environmental taxes, a field in which it is behind other countries around us.

The almost 500 million euros that the tax has collected until the end of October represent a small contribution to the total collection in the period. In 10 months, the Tax Agency registers 235.4 billion euros of income, 5.2% more than last year. However, its first year in operation has served to prevent the excise tax section, which like VAT is linked to consumption, from going backwards. The Tax Agency itself explains that this tax block increases your income by 1.6%, while without this tax, the result would be a drop of 1.2%.

Furthermore, it is among the tax regulations that have come into force this year and that are having the greatest impact in terms of increasing revenue. According to the Tax Agency statistics, notable in this sense is the limitation on companies to compensate for losses in their subsidiaries, which is contributing more than 720 million euros, or the tax on large fortunes, which has provided income for the State of 622 million. However, these are temporary measures, while the plastic tax is permanent.

On the other hand, the 500 million earned through this means compensate for part of the loss of income caused by the temporary tax cuts that the Government has applied as part of the measures against inflation. Thus, to give an example, it practically covers the entire impact this year of the reduction in VAT on electricity, which until October amounted to 514 million euros. Although the Government has not yet finalized its plans with this reduction, it is likely that it will cease to be in operation starting at the end of the month.

Right opposition

The right harshly attacked this tax at the beginning of the year and even asked the Government to suspend its entry into force and withdraw it. Specifically, they requested a one-year delay in its entry into force. As they explained, their request was aimed at not making the shopping basket more expensive in a context in which inflation was putting pressure on food purchases and the Government was preparing to introduce a reduction to 0% for fresh products.

The PP even proposed a bill in Congress to delay the entry of these taxes, something that was rejected by the Executive. The rule, in addition to the tax on plastic, included another on waste in landfills and the Government assured that withdrawing both taxes would have caused a loss of more than 1.1 billion in income. Furthermore, Ribera has defended throughout this time the limited impact on the final consumer. Specifically, he assured that it is “so subtle and discreet” that what you pay for a typical 1.5-liter bottle of any drink is 0.0135 euros, that is, “a little more than a cent.”

Although it is true, the tax has generated a certain complexity for companies to know whether or not their products fall within the scope of the tax. There are different limitations and examples that are excluded. Proof that this is a tax that has just been launched and that raises doubts in the sector is that the General Directorate of Taxes (DGT), dependent on the Ministry of Finance, has received more than 160 queries since the beginning of the year.

In these consultations, among other things, the DGT explains to companies that approach with doubts issues such as artificial casings for storing sausages, the importation of packaged products (even if what is imported is the product and not the packaging) or the Packaging reels with plastic are subject to the tax. It also affects other products such as lipstick, cream jars or the plastic meshes used to store fruit and vegetable products.

The VAT reduction on food already amounts to 1.4 billion

The Tax Agency statistics also allow us to have other interesting data on tax collection until the end of October. One of them is the reduction in VAT on food, a measure that the Government has already advanced that will last until June next year. Since this tax cut came into effect in January, it has meant a loss in income of more than 1.4 billion euros. Despite this, food maintains a rise in the CPI in October of 9.5%, compared to 3.2% for the economy as a whole.

The monthly collection data also leaves us with some trends to know where the end of the year in income will go, which will presumably once again exceed last year’s income record, although with more moderate growth. In total, homogeneous income increased by 5.8%. The growth of personal income tax stands out, collecting 9.6% more. And this despite the fact that almost 1,500 million have been lost due to the expansion of the tax benefit for the lowest incomes. Corporate tax grows by 9.7%, despite the fact that the Tax Agency already sees a “moderation in the increase in profits.” VAT, another of the major tax figures, barely grew 0.1%.

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