Business against packaging taxes

July 5th, 2016 Interfax-Ukraine held the press conference “NO to new taxes! YES to separate collection of packaging waste!” The representatives of industry and business associations expressed their unified position against the tax on production and import of packaging and packaged goods. The event was attended by the President of UAC Leonid Kozachenko, the President of American Chamber of Commerce in Ukraine Andrij Gunder, the Deputy CEO of European Business Association Svitlana Mykhailovska, the Chairman of Ukrainian Milk Traders Association Vadym Chaharovsky and the RPR expert Mykhailo Sokolov.

The draft law №4836 dealing with the waste placing taxation and related laws provoked the indignation of Ukrainian businessmen because it might lead to increase in rates of environmental tax and the introduction of new tax on packaging. If the law is implemented, this tax will automatically be included into the cost of packaged goods. Consequently, the price of the most essential goods rises and the tax paying falls on the shoulders of average citizens. Depending on the packaging material and its weight the price of provision will vary. For example, people will pay an additional 1.47 UAH per kilogram of carton, but 5.46 UAH for the same amount of plastic. According to estimates of Ukrainian Packaging & Ecological Coalition, in 2017 the population will spend an additional 6.6 billion UAH for the waste treatment as a result of increasing the prices for basic foodstuffs. Thus, according to the bill, the average rate on household waste management for the population (now around 46 UAH / m3) will run up by 4.7 times.

In addition, referring the participants of the press conference, four laws about packaging tax (№№ 4835, 4836, 4837, 4838) complicate the integration of our country into the European community. Instead, in February Business Association offered an alternative draft law №4028 "On Packaging and Packaging Waste", which would initiate solving the problem of collecting, sorting and recycling of waste.

One of the bill‘s authors, MP of Ukraine, the President of UAC Leonid Kozachenko said that "this issue is important not only now, but it was so over the last 10-15 years." He emphasized that Ukraine should adopt European experience in recycling that is seriously controlled by state and regulated by law. In particular, the developed countries are practicing separate collection of waste. "This experience should be the basis for the future Ukrainian legislation concerning the problem of waste management and recycling. I think that only №4028 could be such a law. It has passed all examinations and is supported by all current business community," - says the UAC President. In addition, L. Kozachenko noticed that citizens should be aware of the importance of waste sorting and recycling for maintaining the environment, and the members of parliament, in their turn, must take the only one right decision.

What to do in this situation and what does the industry offer? These were the questions looking for answers during the press conference. Representatives of the business community are ready to take responsibility and create a non-profit company that will finance a system of sorting, transporting and recycling of waste, including packaging waste. Enterprises support the principle of extended responsibility for the goods in packaging they produce. However, business representatives expressed their worries regarding the possibility of creating a monopoly on waste recycling and recultivation of landfills. This would be a step back, which might peril the effectiveness of reforms and destroy the market economy.

IC UAC