Liz Gyekye / packagingnews.co.uk
Irish firms ‘could migrate to UK’ over pack tax
Packaging firms in Ireland could migrate to the UK if the Irish government goes ahead with plans to introduce a packaging tax, according to Repak.
Repak is Ireland’s packaging recycling body and operates in a similar vein to Valpak. In May, Ireland’s government launched a consultation on the possibility of introducing a packaging levy.
Under UK packaging regulations, packaging firms that produce more than 50 tonnes of packaging in a year and have a turnover of more than £2m have to join a compliance scheme that takes on their statutory recovery and recycling obligations. In contrast, packaging firms in Ireland that produce more than 15 tonnes and have a turnover of more than £1m have to join a compliance scheme.
Repak said that funds raised from the Irish system fund the provision of domestic and commercial recycling. In contrast, the UK system funds only commercial recycling.
‘Migration to Britain’
Speaking to PN, Repak membership services manager Declan Martin said that the imposition of a tax on top of existing Repak fees could mean the closure and migration of some businesses to Britain, where the funding costs for recycling would be lower.
He added: “It is more likely to apply to companies that are highly competitive such as food and drink production or primary processing. Companies already pay a de facto packaging tax to Repak.”
He said that the packaging tax proposals were short on detail and “seem like a revenue raising tax for the government”.
The consultation on the packaging tax closed last month. In its submission to the consultation, Repak said that its fee structure is both equitable and efficient.
Potential job losses
Repak also said it consulted with its member companies in preparation for its submission. It added: “Most producers are already operating on tight margins, and any new tax or levy which would add to their cost base could undermine competitiveness and lead to job losses. This reaction was very strong in sectors such as food and drink, fertilisers and indigenous exports, which are already facing significant cost competitiveness from abroad, particularly the UK.
“There is already strong pressure from such businesses and their trade associations for a reduction in Repak fees. While it is noted that Repak fees are considerably lower than those in mainland Europe, they are generally higher than their equivalent in the UK. Any additional increases in packaging charges could mean the closure of such businesses or business lost to UK competitors.”
A Department of the Environment, Community and Local Government spokeswoman told PN that it received over 60 submissions to its consultation. She added: “These submissions are currently being collated and considered with a view to making a recommendation to the Minister [Phil Hogan] regarding next steps during September.”
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