The packaging industry will be affected by the impending implementation of a Plastic Packaging Tax (PPT) on April 1, 2022. According to research, 83 percent of businesses are not aware of the new tax law pertaining to plastic packaging.
Is your company ready to deal with the new tax implementation?
Businesses that manufacture or import certain finished plastic packaging materials will be subject to the tax. It will apply to both UK and international organizations. We recommend that action be taken now since changes to systems, processes, and controls will be required to record the data to manage compliance, contracts, and pricing. The tax is expected to have a significant impact on a variety of industries, including, but not limited to:
- manufacturing
- consumer goods
- retail
- food and beverage
- pharmaceutical and cosmetics.
As the UK government pointed, “The aim of the tax is to provide a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging, which will create greater demand for this material. In turn this will stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.”
Businesses will need to consider their packaging strategy in the build up to the tax taking effect. Key questions to ask are as follows.
- Have you assessed your supply chains to determine which entities may be impacted across your corporate group?
- Specifically, will the product you manufacture/import be subject to PPT or does it qualify for exemption?
- Will contracts allow your suppliers to pass the cost of this tax on to you? Can you pass it on to your customers? Are contractual changes needed?
- Have you modelled the financial effect of the tax on your pricing/margins?
- From a governance perspective, what changes to your processes and controls are needed and which teams/persons will have responsibility for this tax?
Multitank provides sustainable solutions for every industry, and we want to help you in developing a long-term strategy that will optimize your growth.
Let’s shift to sustainability together.