A STIFF fine of $10 000 or a two-year jail term awaits anyone who wilfully tries to evade paying the proposed new three per cent Environmental Levy.And manufacturers who fail to apply to become a “registered manufacturer” under the act will be liable on summary conviction to a fine of $5 000 or a year in jail, and in the case of a continuing offence, a fine of $500 for each day or part thereof during which the offence continues after a conviction is first obtained.These are some of the penalties contained in the Environmental Levy Bill 2010, which is expected to be debated when the House of Assembly meets on Tuesday at 10 a.m.The bill, notice of which was given in the House since March 5, would revise the 1996 law relating to the imposition of the Environmental Levy in order to make the law consistent with the provisions of the Revised Treaty Of Chaguaramas and at the same time to validate the Environmental Levy paid and collected pursuant to the 2008 Budgetary Proposals.Clause 43 states that the Environmental Levy purportedly paid and collected under the Environmental Levy Act from September 3, 2008, pursuant to the Budgetary Proposals, “is deemed to have been validly paid and collected”.The bill is also to repeal the 1996 Act with Sections 1 to 40 and 42 of the new measure scheduled to become operational from April 1, 2010 – the start of the current financial year.The original act had imposed the levy, aimed primarily at the preservation and enhancement of the environment, on a wide range of goods including:• a rate of $10 per unit for motor vehicle tyres, and $1 per unit for other types of tyres; and• a one per cent levy on all goods imported in containers of plastic, glass, metal, or paperboard, in addition to empty containers imported and made of plastic, glass, metal or paperboard.This law sought to promote efficient solid waste management and implement the Polluter-Pays Principle by defraying costs of waste collection and disposal of imported goods.UnderpinningsIn his July 2008 Budget, Prime Minister and Minister of Finance David Thompson announced plans, not only to apply the levy to local production as well as imports, but also to hike the ad valorem rate of 1.5 and two per cent to two and three per cent respectively.He explained then that one of the major underpinnings of the Revised Treaty of Chaguaramas was that any taxation introduced by regional member states should not distort competition by discriminating against products from other member states.“A case in point, Sir, is this country’s Environmental Levy. The legislation represents an attempt to introduce the concept of the ‘polluter pays’ by including the environmental costs in the price of goods. However, the application of the levy in Barbados to imports and not local production has breached the treaty.“A call has therefore been made by other treaty partners for Barbados to make its Environmental Levy legislation consistent with the rules of the Revised Treaty Of Chaguaramas.“The mischief identified by CARICOM is relative to the fact that Barbadian manufacturers are being given an unfair advantage over their regional counterparts by not having the Environmental Levy imposed on their output. However, the levy is imposed on regionally manufactured goods entering Barbados.“It is in this context that I wish to announce that the levy will now be applied on local production as well as imports. However, those manufacturers who export their goods will now qualify for a rebate of the levy on the exports.”
With the 2010 Budget pending – opponents of the Government say overdue – the private sector is placing the scrapping of this levy, which it estimates to have raked in about $50 million annually in the two years it has been provisionally collected, high on its priorities “wish list” for the Minister of Finance. Andy Armstrong, senior vice-president of the Barbados Chamber of Commerce and Industry, said in a recent comment on what he would like to see in the 2010 Budget, that the Prime Minister ought to scrap the levy.“This ranges from one to three per cent and is currently only levied on goods imported into the island,” Armstrong noted. “Under international trade agreements, Barbados will be forced to either charge this levy on locally produced goods or to scrap it altogether.“Collecting the levy on locally produced goods will be difficult and the collection process could cost more than the local levy will bring in. It will also increase the cost of many locally produced items. Recycling“I strongly support environmental activities such as recycling and developing renewable energy, but I have never seen clear evidence that this levy is being channelled in that direction. Currently, it appears to be simply another source of revenue for Central Government, and an inefficient one.”The original act provided for a tipping fee of $40 per tonne of waste deposited in a landfills, and Thompson had said the operational costs of maintaining the landfills could have reached the $5 million mark for fiscal year 2008/2009, while the new ad valorem rates were expected to yield an additional $3.5 million in revenue.This new bill calls for the levy to be imposed on the customs value of imported goods as if it were a duty of Customs within the meaning of the Customs Act; or the price of the goods where the goods were manufactured in Barbados.It calls for “registered manufacturers” to submit to the Comptroller – who shall administer the levy – quarterly statements no later than 21 days after the end of each quarter.Failure to do so will render the manufacturer liable to a penalty of ten per cent of the levy payable and unpaid at that time; while failure to submit an annual statement will attract a $500 penalty.Other offences include: failure to submit any statement required to the Comptroller; failure to comply with requirements of any notice in writing; refusal to answer truly and fully any questions or to supply any information required in relation to the manufacture of chargeable goods; failure to keep a proper record of transactions or to preserve books of account or other records as required.It is also an offence to fail to disclose the quantity of any chargeable goods sold during the relevant month or any material facts; signing any statement submitted to the Comptroller without reasonable grounds for believing that statement or any part thereof to be correct; and obstructing or hindering the Comptroller or authorised persons in the discharge of functions under the act.The penalty is a fine of $5 000 or imprisonment of a year, and in the case of a continuing offence, a fine of $500 for each day or part thereof during which the offence continues after a conviction is first obtained.For offences respecting liability to pay the levy, the penalty is a fine of $10 000 or imprisonment for two years; while the penalty for making incorrect statements affecting the liability of another person to pay the levy, will attract a fine of $5 000 or a one-year jail term.
