New plug tax in SA a bad idea

The Department of Environmental Affairs’ proposed environmental levy on all goods which have an electrical plug will not work to limit the impact of these goods on the environment. This is according Dawie Roodt, director and chief economist at the Efficient Group.

Last year Department of Environmental Affairs spokesman Albi Modise said that the new levy was aimed at managing the disposal of electrical products after they were no longer used.

The new levy or tax was therefore a way to get funds to help limit harm to the environment by electrical equipment.

Modise said the department was planning to improve the “management of various waste streams”, which included electrical equipment. While the plan behind the tax was a good idea, Roodt said the tax will fail in practice.

Roodt said the biggest problem was that the government did not have the capacity to implement and manage such a project.

Another problem was that the “plug tax” would be levied when the product was purchased – not encouraging people to use their appliances for longer, or dispose of them in the correct manner.

The fact that a plug levy or tax would further complicate an already very complicated tax system in South Africa was also a problem.

May go the way of plastic bag levy

Roodt said history showed that if a special tax was earmarked for a specific purpose, it inevitably became part of the bigger tax pool in the long term.

The plastic bag shopping levy was a good example. This levy was intended to establish and encourage recycling facilities.

However, the structures and organisations started by the Department of Environmental Affairs to handle this failed.

The plastic bag shopping levy funds now simply form part of standard taxes, and are not ring-fenced by the Treasury for recycling.

MyBroadband contacted the Department of Environmental Affairs for comment regarding this issue, but it did not respond by the time of publication.

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New plug tax in SA a bad idea