- Says it was illegal but won’t be collecting it from businesses
- Warns that businesses are likely to raise prices because of official levy
The government has iterated its position that it will not collect the levy previously charged by businesses for plastic bags because the surcharge legally sanctioned by any law.
This follows the coming into effect of a new 15 thebe plastic levy on 1st July.
The Permanent Secretary of the Ministry of the Environment, Natural Resources, Conservation and Tourism, Babusi Hill, told The Botswana Gazette this week that introduction of prices for plastic bags followed consultations on introduction of the levy. Hill said the ministry’s responsibility is to collect 15 thebe for each plastic bag from manufacturers on the basis of the official levy which started on the first day of July this year.
“The money that people have been paying for plastic bags was not a levy but the industry introducing a price tax for themselves to recover their own costs,” she said. “The government has now come up with a levy of 15 thebe per bag, which is going to be an additional cost to existing prices of plastic bags.”
She added that the government is not sure if the industry will hike prices as a result. Hill believes it was after consultations that the industry developed pricing around plastics to prepare for the coming fee. The only money to be accounted for and collected will therefore be from the time that the law on the levy became official.
Meanwhile, Managing Tax Consultant at Aupracon Tax Specialists, Jonathan Hore, has said businesses are likely to hike prices. Hore believes that prices should be taken down to 15 thebe now that there is an official law guiding the levy. The industry has been selling prices at between 25 and 50 thebe for several years. Because of this background, Hore says businesses are not likely to conform with laws but will most likely increase prices to about 65 thebe per plastic bag.
“It is quite possible that anybody who sells plastics might increase prices,” he told The Gazette. “Under normal circumstances, you would expect prices to go down, but that is not common practice in business. They don’t usually bring prices down because of a law.”
He further said the levy if increased would likely affect low-income earners and the unemployed, while high income earners are not going to notice any change. Hore said the Levy will be collected from manufacturers and at points of entry when imported. Industry will not directly be approached for the fee. “The retailer is basically going to pass it on to the consumer,” said Hore.
The levy joins a number of other administered prices which will continue to weigh heavily on consumers while benefitting the government through fighting pollution and raising revenues. Hore also warned against exorbitant hikes, saying there are complaints of instances where prices reach P1 already. He advised consumers to always check with authorities when under the impression that prices are not what they should be.