International Review of Waste Management Policy - Department of ...

that only 8,000-10,000 businesses will be liable for the tax. 604 Businesses that
supply packaged products on the Dutch market are also liable to the tax. This
includes manufacturers, importers, wholesalers and retailers.
28.7 Effects on Technical Change / Innovation
Material based taxes such as this may be anticipated to drive technical change for
the production industry to use alternative packaging materials (where the costs of
more environmentally damaging materials become more expensive than alternatives).
Of course packaging minimisation (with material use efficiency balanced against
product protection) is also stimulated by increased costs of using materials which
constitute packaging.
28.8 Social and Distributional Consequences
The Danish EPA is not aware of any studies carried out on the distributional effects of
the tax. In principle, the tax is rather small and is unlikely to affect product prices
significantly. Hence, although it has the potential to be regressive, its impacts are
unlikely to be significant in and of themselves.
Waste management industries involved with final treatment are expected to see
some decline in activity whereas those involved with recycling, re-use and
minimisation should see their sector grow.
The policy could have a strong impact on industries such as steel and aluminium, i.e.
they are subject to the highest taxation rates, since they are deemed more
environmentally damaging. Conversely, those taxed at lower rates could benefit from
material switching. The unit rates, however, are not necessarily representative of the
strength of incentive to switch from one material to another since the functional units
of packaging require different weights of the different materials.
28.9 Complementary Policies
In Denmark, the packaging tax is designed to compliment other existing marketbased
instruments. In particular, the scheme compliments the deposit refund scheme
for drinks containers. Within the Danish system, drinks containers are subject to a
levy based upon their volume rather than their weight. This variation in the tax
encourages containers to be reused many times, because payment of the tax is only
required on new containers entering the market – reuse is thus encouraged over
recycling by this scheme.
In the Netherlands, the tax effectively complements the voluntary agreement between
central and local government in respect of packaging collection.
604 Ernst and Young Indirect Tax Alert, January 2008.
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International Review of Waste Policy: Annexes