Irish 'Plastax' Bites Today

by Justin Gorringe, Tax-News.com, London

04 March 2002

Today sees the introduction of a tax on plastic bags in Ireland - known in the republic as the "plastax". The plastic shopping bag levy has been introduced to combat the problem of unsightly and even dangerous discarded bags. From this morning every plastic bag used at a checkout will cost shoppers 15 cents.

The charge had been scheduled for introduction in February, but Environment Minister Bobby Molloy decided that Irish retailers would probably have enough on their plates following the euro-changeover, and would need some time to prepare for the new tax. Signing the regulations into law in December, he explained: 'Having considered all representations made, I have now decided to introduce the levy on March 4 - to avoid any clash with the euro-changeover period, and to allow retailers to put in place any necessary changes and training to implement it.'

It is estimated that the new tax, when introduced, will raise an additional £100 million for the government, but the government has stressed that the point of the exercise is not stealthy revenue raising. 'The primary purpose of this levy is not to generate revenue, but to change consumer behaviour,' said Mr Molloy. 'I want to see a significant reduction in the use of plastic shopping bags and a subsequent reduction in the number of bags that end up as litter.' It is thought that at present, Irish consumers receive the equivalent of 325 free bags per person annually from retail outlets.

Cash raised will be used to establish a green fund for schemes benefiting Ireland's environment. Tesco Ireland, one of the main supermarket chains, said it welcomed the initiative. The company hands out 220m bags annually but hopes to reduce that by at least 40% in the first year of the levy. "Customers are telling us they broadly welcome the introduction of the levy," said Jim Dwyer, Tesco Ireland's environmental manager. "We have seen a marked change in customers' behaviour in anticipation of the new levy, reflected in the significant increase in sales of our reusable bags."

However, there is a lengthy list of exceptions from the levy: "Certain types of plastic bags will be excluded from the levy," an official statement says, such as "reusable shopping bags sold for 70 cents or more, bags used to contain fresh meat, fish or poultry (whether packaged or otherwise), bags used to contain loose fruit and vegetables and other foods that are not otherwise packaged, and bags used to contain ice".

Musing on the new tax, an Irish Times columnist anticipates smuggling of bags from South Armagh and wondered whether there would be "Bag Patrols, with Bag Rangers abseiling out of helicopters when illegal bags are spotted racing through the countryside at midnight?".

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