New plastic tax receives bad reviews
Consumers may not have felt it quite yet, but in the coming weeks a number of imported goods will soon sport higher price tags. The reason: a new tax which was supposed to help the environment is in the first instance just increasing the cost of living. Jose Sanchez reports.
Jose Sanchez, Reporting
It sailed through the National Assembly with little fanfare and since April first the government of Belize has been collecting a five percent environmental tax on the importation of a variety of products. Comptroller of Customs, Omar Sabido, says that if the packaging contains plastic it is suitable for taxation.
Omar Sabido, Comptroller of Customs
“The importation of empty plastic bottles, containers and other packaging materials made of plastic imported into Belize is one situation. The second situation is where the environmental tax also applies to goods imported in plastic bottles, in plastic containers and other packaging materials made of plastics.”
But the rub is that in the second scenario, the five percent is applied, not just to the value of the plastic packaging, but to the value of the entire product. This can lead to some strange results.
Lizette Valdes, Customs Broker
“I think it’s unfair because people are paying too much tax or too much money on it. For example, we just had a client that brought in paper cups and, that’s to help the environment, and he pays a lot for the paper cups, but the paper cups came in a paper box and they were wrapped in plastic in the box. So for that he had to pay five percent of the C.I.F., which is a lot of money.”
Paper cups are one thing, but what if you imported a new hundred thousand dollar boat, for example, and that boat arrived wrapped in plastic to protect its finish? According to the comptroller of customs, that wrapping would cost you an extra five thousand dollars.
Omar Sabido, Comptroller of Customs
“At this moment we would say, yes, if the boat is entirely covered, not for example, if a boat comes with a regular plastic covering, that’s not packaging. But if it’s shrink wrapped, you have some items…I think boats come that way sometimes. If the packaging…If the boat is packaged entirely in plastic, then we would have to say that it is packaged in plastic and the environmental tax will be applied indeed.”
Victor Vasquez, Customs Broker
“I don’t think it’s fair and it’s not doing its job. There could be a solution to this. Paying five percent on the C.I.F. is definitely a killer. It will cause everything to go up, cost of living will go up. What I would suggest that they could do, is customs have an evaluation branch, they could have an officer go and assess what is the value of the shrink wrap or what’s the value of a styrofoam in what probably and outboard motor comes in and then we pay the five percent on the value of the plastic.”
But brokers are not the only ones upset by the new levy. Large stores such as Brodies will feel the greatest pinch.
Edward Musa Sr., Managing Dir., James Brodie & Co.
“I would say about fifteen or twenty percent of the items that we deal with do not come in plastic. In other words about eighty percent of the merchandise that we import has some form of plastic in it.”
Jose Sanchez
“You do have to make profit, so who pays the tax?”
Edward Musa Sr.
“Well that becomes part of our cost and naturally we have to pass it on to the consumer.”
“Personally I think five percent is too high. I think they should have gone with maybe one percent on plastic articles instead of five percent. The one percent the consumer wouldn’t have felt it too much because when you put a percentage on one percent it is very negligible. But on five percent, I think it’s too much.”
Omar Sabido
“If there are concerns by the importing community, we have to put it forward and then perhaps it can be considered. They may have valid points where they can show this is not exactly economically feasible for the importation of the item itself. But they being the business community they have to put up their concerns.”
Not all products packaged in plastic will see increases. The Customs Department has issued a list exempting basic food products and an assortment of goods such as ketchup, pampers and toothpaste. But whatever the outcome of the situation, it is crystal clear who will bear the burden of the tax.
Lizette Valdes
“The consumers, we the people, so that in small words life has gone up since this tax.”
Omar Sabido
“Well I think that is a common knowledge that the consumer ends up paying whatever taxes are imposed.”
Edward Musa Sr.
“Most of the goods we are bringing now, we don’t have a choice, it’s plastic. It’s much cheaper to bring in plastic. Even by paying the five percent environmental tax, it will be cheaper to bring in plastic bottles than glass bottles. To begin with, the plastic is lighter so the freight weight will be better than bottles which is heavy.”
Jose Sanchez
“So in the end, it will not restrain anyone from importing plastic?”
Edward Musa Sr.
“No I don’t think so.”
Jose Sanchez
“It is an environmental tax, do you see it benefiting the environment? Is it doing its job?”
Lizette Valdes
“No it’s not. You see our streets littered with Crystal bottles, Coke bottles, Big H. Just look around, I don’t see any shrink wrap on the road.”
Reporting for News 5, Jose Sanchez.
Those new plastic soft drink containers, because they are imported as pellets and later molded into bottles here in Belize, pay only a tiny fraction of a cent each in environmental tax. Other imported drinks, foods or shrink wrapped items not on the exempt list that are packaged in plastic can be expected to go up in price by at least five percent as soon as new shipments arrive in the country. Revenues from the new tax are supposed to finance a new solid waste management project for the entire nation.
