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The waste management would not be reformed only by increasing taxes , – EBA

26/ 01/ 2022
  After a significant increase in taxes, including for waste disposal, by 10% from January 1, deputies propose to increase the rate of this ecotax again. Today, January 26, the Verkhovna Rada Committee on Environmental Policy and Nature Management will consider two draft laws on the environmental tax on waste management – №6345 and the alternative №6345-1. Both documents aim to raise environmental tax rates on waste disposal but with different approaches. Thus, draft law №6345 proposes to exclusively increase the rates of ecotax on waste disposal (by 3 - 13 times). This approach can have a negative impact on businesses that operate legally and pay their taxes transparently, as well as on ordinary citizens, for whom tariffs for household waste disposal services will increase. Moreover, the introduction of a new tax on the household waste of UAH 88 per ton in the absence of a legally established European waste management hierarchy will facilitate the shadowed waste management market and, as a result, increase the number of illegal landfills, littering reservoirs and forests, etc. Instead, draft law 6345-1 provides for a moderate increase in the ecotax rate, with the possibility of reducing the payment by 50% of the rate if the taxpayer implements environmental measures for air protection and rational use of water, land, minerals, flora, and fauna, and household waste. Moreover, this approach will help increase the transparency of the industry, regarding the official tax declaration and disposal of waste. Olga Boiko. EBA Industrial Ecology and Sustainable Development Committee Coordinator. We at the European Business Association understand the Government′s desire to increase responsibility for waste management, but we will not be able to solve this issue with purely fiscal methods. As shown by the increase in the carbon tax in 2019 by 2340% from UAH 0.41 to UAH 10 per 1 ton, it helped reduce greenhouse gas emissions by only 5% maximum. Although expectations were much higher. Moreover, these funds are not used for their intended purpose. But, for example, on the road construction. Surely, it is good that the same roads are being repaired, but this should not be at the expense of environmental funds. Therefore, businesses have long been waiting for a comprehensive approach to greening the economy, which includes the adoption of a draft law on waste management, as well as the possibility of targeted use of ecotax funds. The last issue, in particular, can be tackled by the draft law №6345-1 and we propose to take it as a basis, but with further elaboration. Therefore, EBA urges to support draft law №6345-1 and foster the implementation of incentive policies in waste management in Ukraine.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

After a significant increase in taxes, including for waste disposal, by 10% from January 1, deputies propose to increase the rate of this ecotax again.

Today, January 26, the Verkhovna Rada Committee on Environmental Policy and Nature Management will consider two draft laws on the environmental tax on waste management – №6345 and the alternative №6345-1.

Both documents aim to raise environmental tax rates on waste disposal but with different approaches.

Thus, draft law №6345 proposes to exclusively increase the rates of ecotax on waste disposal (by 3 – 13 times). This approach can have a negative impact on businesses that operate legally and pay their taxes transparently, as well as on ordinary citizens, for whom tariffs for household waste disposal services will increase. Moreover, the introduction of a new tax on the household waste of UAH 88 per ton in the absence of a legally established European waste management hierarchy will facilitate the shadowed waste management market and, as a result, increase the number of ” illegal landfills, littering reservoirs and forests, etc.

Instead, draft law 6345-1 provides for a moderate increase in the ecotax rate, with the possibility of reducing the payment by 50% of the rate if the taxpayer implements environmental measures for air protection and rational use of water, land, minerals, flora, and fauna, and household waste. Moreover, this approach will help increase the transparency of the industry, regarding the official tax declaration and disposal of waste.

Olga Boiko EBA Industrial Ecology and Sustainable Development Committee Coordinator
We at the European Business Association understand the Government′s desire to increase responsibility for waste management, but we will not be able to solve this issue with purely fiscal methods. As shown by the increase in the carbon tax in 2019 by 2340% from UAH 0.41 to UAH 10 per 1 ton, it helped reduce greenhouse gas emissions by only 5% maximum. Although expectations were much higher. Moreover, these funds are not used for their intended purpose. But, for example, on the road construction. Surely, it is good that the same roads are being repaired, but this should not be at the expense of "environmental" funds. Therefore, businesses have long been waiting for a comprehensive approach to greening the economy, which includes the adoption of a draft law on waste management, as well as the possibility of targeted use of ecotax funds. The last issue, in particular, can be tackled by the draft law №6345-1 and we propose to take it as a basis, but with further elaboration.

Therefore, EBA urges to support draft law №6345-1 and foster the implementation of incentive policies in waste management in Ukraine.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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