R1.2bn plastic bag tax diverted

By Andrea Chothia Time of article published Jul 13, 2016

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MORE than R1.2 billion collected from taxes on plastic bags over the past 13 years has not gone to creating jobs for youth in the green industry as it was meant to.

Instead the money has gone to the Department of Environmental Affairs' (DEA) coffers to fund Working for Water and Working on Fire, said the department's spokesperson, Albie Modise.

According to research associates of the Environmental Policy Research Unit at the University of Cape Town, South Africans use about eight billion plastic bags annually.

The levy was introduced as a way to stop people discarding the bags after one use, creating tons of litter, filling up landfills and ending up in the ocean.

The litter was so bad that plastic bags were dubbed the country's national flower.

In 2014, then finance minister Nhlanhla Nene said since the introduction of the levy in 2003 to the end of August 2014, R1.1bn had been collected in levies.“The plastic bag levy was introduced at a modest 3c per bag, payable by plastic bag manufacturers and importers."

National Treasury chief of communication Phumza Macanda said the levy was increased to 8c a bag this year.

Created by the Department of Environmental Affairs, organised labour and business and collected by the SA Revenue Service as tax, the levy’s primary purpose was to cut back on how much plastic ended up being litter, going into landfills or being dumped in oceans.

It was then agreed for the revenue to be distributed to the DEA.

Between 2004 and 2015, the National Treasury allocated 19 percent of the levies they received to the DEA. However, in the 2006/07 and 2012/13 financial years, the Treasury could not account for any allocations.

The DEA says the government received only 0.08c per plastic bag in the 2016/17 financial year and the rest is said to be a production and distribution cost manufacturers can account for.

Nene, however, could 
confirm that over R216 million in funds were appropriated from the National Revenue Fund to the DEA for recycling initiatives since 2003.

Buyisa-e-Bag, a Section 21 company, whose core business was to develop entrepreneurs and create sustainable opportunities in the recycling and waste management sectors, briefed the committee on the setting up of multi-recycling Buy-Back centres. Such centres would buy, sort and resell various plastics, paper, cans and glass.

The company was funded through transfers from the fiscus via the DEA. However, in 2011, the company was disbanded because it had not achieved much. Since then other companies associated with the environment have not received any funds.

After the shutdown of Buyisa e-bag, the functions and allocations were absorbed 
into the DEA, as they had to compensate for employees, operational expenses and transfer payments for projects.

Plastics South Africa's online editor, Dianne Blumberg, said: “These levies collected are not ring-fenced and are therefore used by government as they deem fit. The plastics industry does not receive any of these monies.”

Pick n Pay's group executive of communication, David North, said: “Plastic bags cost 50c at Pick n Pay, which is in keeping with the long-
standing voluntary agreement that retailers should discourage the take-up of single-use carrier bags.”

Environmental campaigner for the Two Oceans Aquarium Hayley McLellan said: “We absolutely do not benefit in any way from the plastic bag levy.

"It would be great if the Department of Environmental Affairs could distribute the money for job creation and recycling purposes.”

According to Modise, in order to create work opportunities through the financial allocations, they contribute towards three initiatives: the social responsibility policy and projects, Working on Fire and Working for Water. 
Modise could not break down the specific allocations.

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