Italy’s new plastics tax, which was announced in the budget for this year, and due to enter force on 1 July, has been postponed.
The controversial law, aimed at reducing the production and consumption of plastic, introduces a tax of €0.45 per kilo of non-recyclable plastic packaging (MACSI), significantly lower than the earlier rate proposed in the draft budget. Examples of products affected by the tax include bottles, carrier bags, PE food containers, tetra pack containers, EPS packaging and plastic caps. Disposable packaging produced from compostable bioplastics or recycled materials, as well as packaging of medical devices, pharmaceutical or medical packaging will be exempt.
The new tax was to have been implemented via a decree this month declaring its entry into force as per the first day of the second month following the date of publication of the decree.
However, the exceptional circumstances of the coronavirus pandemic and its unprecedented impact on the Italian economy led the government to draft and yesterday – 13 May - to approve a new decree, known as the Decreto Rilancio or Relaunch Decree, which provides a bailout package worth €55 billion for industries and families struggling to survive the crisis. Some €4 billion in tax cuts for businesses, as well as extra subsidies, incentives and bonuses were also announced by Prime Minister Giuseppe Conte at the press conference on Wednesday evening.
"We worked on this decree in the awareness that this is a country in great difficulty, with a community of women, of people, in great suffering," said Conte when presenting the Relaunch Decree.
The government is also aiming to simplify administrative procedures and cut back on bureaucracy. The measures, originally announced for late April, were delayed due to tensions between coalition partners, follow an initial €25 billion package that was passed in March.
Article 139 of the present 500-page decree specifically states that the effective date of two much-disputed taxes – the plastics tax and the sugar tax on sweetened beverages – would be postponed to 1 January 2021.
Postponing the tax will mean a loss of some €200 million in revenue for the Treasury: the plastic tax alone was forecast to bring in €140 million this year.
Italy is one of the worst-hit countries in the world by the COVID-19 pandemic. The Italian economy has been estimated to contract by, at the most conservative guess, 8% this year as a result of the current epidemic that has already killed well over 30,000 members of the country’s population.
According to Reuters, the Treasury has predicted that the extra spending, coupled with a collapse in tax revenues, will push the budget deficit to 10.4% of gross domestic product this year.