Economic Instruments - Charges and taxes
Waste Tax (Netherlands)
Background
The Act on taxes with an environmental base required the government to report in 1997 to parliament on the feasibility of the groundwater and waste taxes, as well as possible negative economic or environmental effects that may arise in practice. In June 1997 the government sent an evaluation report to parliament. The general result of the evaluation was positive for the waste tax.
The idea for a waste tax was born during the parliamentary discussions about the environmental tax on fuels in 1992. What was then an earmarked fuel charge was being restructured into a fuel tax to raise revenue for the general budget. Revenue raised by the fuel tax was supposed to increase from Dfl. 1.5 billion in 1992 to Dfl. 2.1 billion in 1994. Because this raise in the tax burden was judged to be unacceptable for large fuel consuming companies, it was decided that the revenue raised by the fuel tax should not be increased above the 1992 level. Parliament asked the Dutch Cabinet to develop other taxes with an environmental base to raise the additional revenue needed. It was felt that the total tax burden would be distributed better over the different groups of taxpayers if additional new tax bases were introduced. This decision led to a proposal for taxes on the landfilling of waste and on the extraction of groundwater.
(Ministry of Housing, Spatial Planning, and the Environment)
Introduced
1st January 1995
Aims
As a consequence of the history of the tax, the primary aim of the waste tax is to raise revenue. Introduction of the waste tax made it unnecessary to raise other taxes with less favourable side effects (e.g. labour taxes). Introduction of taxes with an environmental base also fits into the policy of greening the fiscal system.
The secondary aim of the tax is to generate a positive environmental effect. The fact that disposal costs are substantially lower for landfilling than for incineration is considered a drawback for waste policy. The landfilling of waste is seen as the least desirable method of waste disposal. The waste tax is an important part of the policy presented in the second National Environmental Policy Plan (1994) for raising landfill costs to match those for incineration. The increase in the costs of landfilling would make preferable alternatives such as incineration, recycling and prevention more attractive.
The increases of the tax in 1999 and 2000 are also part of the policy of the government for restructuring and greening of the fiscal system.
(Ministry of Housing, Spatial Planning, and the Environment)
Design
Scope
The proprietor of an establishment where waste matter is delivered for processing is liable for the waste tax. Normally, the tax will be passed on to the suppliers of the waste. In some cases the waste delivered consists of refuse collected by the municipalities. These municipalities can pass the cost increase on to their citizens by raising the local waste disposal charge (an earmarked municipal charge financing the collection and disposal of municipal waste).
Coverage
The waste tax is levied on waste which is delivered to dumps and incinerators. The tax is calculated on the basis of the weight of the waste. Also waste from incineration of refuse that is dumped on the own premises of the incinerating company, is taxed. No tax is levied in cases where other companies dump their waste on their own premises. Since one of the aims of the tax is to decrease the cost difference between incineration and landfilling, the rate for landfilling is higher than for incineration.
The waste tax does generally not distinguish between different kinds of waste. While there may be environmental reasons to use a differentiated tariff for different waste streams, it was decided not to do so for practical reasons. For some waste streams, however, there are special provisions in the Act. For substances and products which, with or without further treatment, will leave the establishment again, is foreseen in a possibility for restitution of the tax. An example is organic waste. In the Netherlands, organic waste is collected separately in order to be composted. Because the separate collection and composting of this so called vegetable, fruit and garden waste (VFG) is a preferable way of disposal, it would not be desirable to tax VFG.
Tax Rates
The rates in 2000 were:
landfilling:
- Dfl. 141.66 (euro 64.28) per ton for waste less than 1,100 kg/m3 and for certain waste streams like dangerous waste and shredder waste
- Dfl. 27.29 (euro 12.38) per ton for waste more than 1,100 kg/m3 (non-combustable waste)
incineration:
nil.
Allocation of Revenues The revenue is not earmarked for environmental policy but is allocated to the general budget. Environmental policy, like other policy fields, is financed from the general budget.
Exemptions
Non-purifiable polluted dredging sludge and soil:
A special category of waste is non-purifiable polluted dredging sludge and soil. This waste stream can not be reduced or prevented because it is the consequence of pollution in the past. Moreover, the remediation of polluted dredging sludge and soil is environmentally preferable to leaving it where it is. For these reasons, this waste category is not subject to the tax. In order for the exemption to be granted in the case of polluted soil, the supplier of the soil needs a statement from the Soil Purification Service Center to the effect that the soil is not purifiable. Because at the moment there are no techniques available for cleaning polluted dredging sludge, all polluted dredging sludge is exempted from the tax until a date to be fixed between 1 January 2000 and 1 January 2002.
De-inking residue:
For de-inking residue there is a provision in the form of a refund of the tax on request. This provision will in principle be continued until 1 January 2001. Taxing these kinds of waste would make paper recycling more expensive than the alternative, thus stimulating the use of primary material. This would be an effect contrary to one of the aims of the tax, the stimulation of recycling.
Asbestos:
Because the costs of responsible removal of asbestos are to be kept as low as possible, there is a temporary nil tariff (until 1 January 2002) for the dumping of asbestos. (Ministry of Housing, Spatial Planning, and the Environment)
Performance
The waste tax has contributed to the desired shift from dumping to prevention, recycling and incineration. Important negative effects or economic problems were not found (Ministry of Housing, Spatial Planning, and the Environment).
The revenue raised by the waste tax is estimated to be about Dfl. 390 million (euro 177 million) per year. The expectation is that in the next years the amount of waste that will be dumped, and therefore also the revenue of the waste tax, will diminish.
References
The Netherlands' Environmental Tax on Waste, Ministry of Housing, Spatial Planning, and the Environment: http://www.minvrom.nl/minvrom/pagina.html?id=1335#2
Information Request
As it is the aim of this website to provide information which is as accurate, comprehensive and up-to-date as possible, please contact us with any aditional information or studies on this topic and we will add it to the website.
Email contact: louise.dunne@ucd.ie
Background
The Act on taxes with an environmental base required the government to report in 1997 to parliament on the feasibility of the groundwater and waste taxes, as well as possible negative economic or environmental effects that may arise in practice. In June 1997 the government sent an evaluation report to parliament. The general result of the evaluation was positive for the waste tax.
The idea for a waste tax was born during the parliamentary discussions about the environmental tax on fuels in 1992. What was then an earmarked fuel charge was being restructured into a fuel tax to raise revenue for the general budget. Revenue raised by the fuel tax was supposed to increase from Dfl. 1.5 billion in 1992 to Dfl. 2.1 billion in 1994. Because this raise in the tax burden was judged to be unacceptable for large fuel consuming companies, it was decided that the revenue raised by the fuel tax should not be increased above the 1992 level. Parliament asked the Dutch Cabinet to develop other taxes with an environmental base to raise the additional revenue needed. It was felt that the total tax burden would be distributed better over the different groups of taxpayers if additional new tax bases were introduced. This decision led to a proposal for taxes on the landfilling of waste and on the extraction of groundwater.
(Ministry of Housing, Spatial Planning, and the Environment)
Introduced
1st January 1995
Aims
As a consequence of the history of the tax, the primary aim of the waste tax is to raise revenue. Introduction of the waste tax made it unnecessary to raise other taxes with less favourable side effects (e.g. labour taxes). Introduction of taxes with an environmental base also fits into the policy of greening the fiscal system.
The secondary aim of the tax is to generate a positive environmental effect. The fact that disposal costs are substantially lower for landfilling than for incineration is considered a drawback for waste policy. The landfilling of waste is seen as the least desirable method of waste disposal. The waste tax is an important part of the policy presented in the second National Environmental Policy Plan (1994) for raising landfill costs to match those for incineration. The increase in the costs of landfilling would make preferable alternatives such as incineration, recycling and prevention more attractive.
The increases of the tax in 1999 and 2000 are also part of the policy of the government for restructuring and greening of the fiscal system.
(Ministry of Housing, Spatial Planning, and the Environment)
Design
Scope
The proprietor of an establishment where waste matter is delivered for processing is liable for the waste tax. Normally, the tax will be passed on to the suppliers of the waste. In some cases the waste delivered consists of refuse collected by the municipalities. These municipalities can pass the cost increase on to their citizens by raising the local waste disposal charge (an earmarked municipal charge financing the collection and disposal of municipal waste).
Coverage
The waste tax is levied on waste which is delivered to dumps and incinerators. The tax is calculated on the basis of the weight of the waste. Also waste from incineration of refuse that is dumped on the own premises of the incinerating company, is taxed. No tax is levied in cases where other companies dump their waste on their own premises. Since one of the aims of the tax is to decrease the cost difference between incineration and landfilling, the rate for landfilling is higher than for incineration.
The waste tax does generally not distinguish between different kinds of waste. While there may be environmental reasons to use a differentiated tariff for different waste streams, it was decided not to do so for practical reasons. For some waste streams, however, there are special provisions in the Act. For substances and products which, with or without further treatment, will leave the establishment again, is foreseen in a possibility for restitution of the tax. An example is organic waste. In the Netherlands, organic waste is collected separately in order to be composted. Because the separate collection and composting of this so called vegetable, fruit and garden waste (VFG) is a preferable way of disposal, it would not be desirable to tax VFG.
Tax Rates
The rates in 2000 were:
landfilling:
- Dfl. 141.66 (euro 64.28) per ton for waste less than 1,100 kg/m3 and for certain waste streams like dangerous waste and shredder waste
- Dfl. 27.29 (euro 12.38) per ton for waste more than 1,100 kg/m3 (non-combustable waste)
incineration:
nil.
Allocation of Revenues The revenue is not earmarked for environmental policy but is allocated to the general budget. Environmental policy, like other policy fields, is financed from the general budget.
Exemptions
Non-purifiable polluted dredging sludge and soil:
A special category of waste is non-purifiable polluted dredging sludge and soil. This waste stream can not be reduced or prevented because it is the consequence of pollution in the past. Moreover, the remediation of polluted dredging sludge and soil is environmentally preferable to leaving it where it is. For these reasons, this waste category is not subject to the tax. In order for the exemption to be granted in the case of polluted soil, the supplier of the soil needs a statement from the Soil Purification Service Center to the effect that the soil is not purifiable. Because at the moment there are no techniques available for cleaning polluted dredging sludge, all polluted dredging sludge is exempted from the tax until a date to be fixed between 1 January 2000 and 1 January 2002.
De-inking residue:
For de-inking residue there is a provision in the form of a refund of the tax on request. This provision will in principle be continued until 1 January 2001. Taxing these kinds of waste would make paper recycling more expensive than the alternative, thus stimulating the use of primary material. This would be an effect contrary to one of the aims of the tax, the stimulation of recycling.
Asbestos:
Because the costs of responsible removal of asbestos are to be kept as low as possible, there is a temporary nil tariff (until 1 January 2002) for the dumping of asbestos. (Ministry of Housing, Spatial Planning, and the Environment)
Performance
The waste tax has contributed to the desired shift from dumping to prevention, recycling and incineration. Important negative effects or economic problems were not found (Ministry of Housing, Spatial Planning, and the Environment).
The revenue raised by the waste tax is estimated to be about Dfl. 390 million (euro 177 million) per year. The expectation is that in the next years the amount of waste that will be dumped, and therefore also the revenue of the waste tax, will diminish.
References
The Netherlands' Environmental Tax on Waste, Ministry of Housing, Spatial Planning, and the Environment: http://www.minvrom.nl/minvrom/pagina.html?id=1335#2
Information Request
As it is the aim of this website to provide information which is as accurate, comprehensive and up-to-date as possible, please contact us with any aditional information or studies on this topic and we will add it to the website.
Email contact: louise.dunne@ucd.ie
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