Swedish Chemicals Agency Proposes Taxation on Hazardous Substances and Textile Chemicals

HONG KONG - Feb. 12, 2014 - PRLog -- The report describes how such a tax might be imposed on this group of products in order to diminish the use of hazardous chemicals and push for substitution and innovation in the chemical field.

Draft on Chemical Tax on Clothes and Shoes

The Agency drafted proposed principles that might be appropriate to be used to determine excise duties that could be the basis for a chemical tax on consumer products containing hazardous substances. According to the Agency, the suggested taxation on clothes and shoes is considered necessary due to the increasing numbers of clothes and shoes containing chemicals that are hazardous for both the environment and health.

According to the report, the Agency tentatively suggests the following list of substances: phthalates, allergenic or carcinogenic dyestuffs and antibacterial agents. Those selected substances should each have appropriate methods for measurement.

Proposed Principles for a Chemical Tax

- The chemical tax is governed by its own excise duty act.
- The scope will gradually be widened to include more consumer product areas and more hazardous substances.
- The consumer products containing one or more from a “list of hazardous substances that meet the criteria for taxation” will become hazardous taxation substances (different lists are drawn up for each product group).
- The hazardous taxation substances would be in addition to those already banned or restricted under existing laws.
- The taxable products shall be those found to contain measurable amounts of any hazardous taxation substance greater than a prescribed concentration limit under a standardized or established method of analysis.
- Taxation is aimed at both imported and domestically produced consumer products placed on the Swedish market.
- The tax levied should be per kilogram or be based on the amount of hazardous taxation substance (further investigated is required).
- The tax levels should be set high enough to have a controlling effect (according to the report, the average price increase for clothing and shoes is estimated at 0.3%).

Impact Analysis before Tax Implementation

The Agency must therefore conduct an impact analysis based on the proposed principle (i.e. by groups of substances and not specific substances) with further investigation which should be carried out before any concrete steps are taken to introduce such economic policy measures. Also, a complete proposal must be notified to the European Commission before it is implemented.

The Swedish Chemicals Agency states that such an economic policy measure of applying a chemical tax on consumer products would complement existing chemical regulations and drive forward innovation and substitution.

For further details, refer to the Swedish Chemical Agency report (in Swedish, with English summary) (http://kemi.se/Documents/Publikationer/Trycksaker/PM/PM7-...).

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