The UK landfill tax was introduced in 1996. HM Revenue and Customs of Federal Institution collect the tax. Initially the purpose of landfill tax was internalizing externalities regarding landfill; however, the tax rate had been too low. It is increasing in order to changing people behaviour.  In other words, the first goal was to add cost of externalities. Later, the goal became changing behaviour by increasing the tax rate. The landfill tax regulation covers most of waste such as soil, sand construction or inert residues, recycling residues, including Hazardous waste. The landfill tax regulation in UK leads to the incentives for better waste management.   I believe the landfill tax regulation works. I will explain how in detail later. Beforehand I want to show an example of Netherland. The country enjoyed high level of government revenue by levying tax on landfill waste. This results in improving the waste management and decreasing the volume of waste and decreasing in revenues. In the end, the ministry of finance in the Netherlands has announced that the tax from January 2012 was eliminated in order to ease the administrative system.  Likewise, I think UK taxation is necessary, but it is time to reduce the tax rate.

I talked what landfill tax regulation covers in the beginning, for the exemption of taxation, it includes “dredged waste from inland waterways and harbours; waste arising from mining and quarrying operations; the burial of pets; waste arising from clearance of contaminated land, waste used for the restoration of landfill sites, and waste from the filling of quarries” (1) In other words, it is waste coming from mining, harbour, and quarry.

Since the landfill tax implemented in 1996, there are two impacts we need to consider: the environment and the social impact.  Thanks to the landfill tax, the amount of waste landfilled has declined greatly. From 1998 to 2010 the overall landfilled has reduced to 46 million tonnes from 90 million tonnes. From 2001 – 2005 the amount of landfilled waste diminished by 5 million tonnes. As well, for the Economic impact, the tax provided large amount of government revenues. Even though the total waste landfilled has been reduced, the total amount of revenues has been increasing. It is because the tax per ton is also increasing. Thus we can conclude that the reduced landfilled refers to the success of chaining people behaviour. People become more aware of environment damage due to taxation of waste landfilled; on the other hand, we can put a question mark that it would be the time of decreasing the tax rate in United Kingdom like the example of Netherland where the tax rate decreased after the total amount of waste landfilled decreased.

The Tax is regulated by HM Revenue and Customs. When it is introduced in 1996, the tax was set at EUR10/t for active waste, and EUR 2.9/t for inert waste. In 2005 the tax for active waste was increased to EUR 26/t, and in 2008 to EUR 40.8/t, and in 2010 to EUR 54.1/t, and in 2011 EUR 64/t. In case of Inert waste, the tax is pretty much constant around EUR 2.9/t over 5 year. The amount of tax levy depends on whether it is active or inactive waste and the weight. Landfill tax is paid by ‘directly’ by the landfill operators. In order to pay the tax, the operators charge the landfill costs including taxes to local businesses and councils.

The purpose of landfill tax is funding landfill operator to support projects with environmental objectives. UK land fill tax credit purpose is same as tax. (Because I focus on Landfill tax, tax credit mentions once here). From April 2005, two thirds of the revenue allocated to Business Resource Efficiency and Waste (BREW) programme. “BREW was developed in consultation with business representatives, the Treasury and the Department for Business, Enterprise and Regulatory Reform (DBERR) and allocates funds to specific programmes such as Envirowise, the Waste & Resources Action Programme (WRAP) and the National Industrial Symbiosis Programme (NISP) to promote more sustainable waste management on the part of commerce and industry”(1). Based on what I research, the tax benefits are allocated to landfill firm instead of everyone who pays the tax. The specialized program might be beneficial to promote better environment management for landfill waste. Meanwhile, there is also possibility of high opportunity costs to maintain rather complicated administrative system

The landfilled waste tax definitely plays a role in decreasing the total level of waste and providing incentives for further development reducing waste. It was expected to decreasing in construction, demolition and excavation waste from 23 million to 12.5 million from 2008 to 2012 due to taxation. However, it is quite surprising that United Kingdom has been collected the highest revenue which is EURO 1200 million IN 2001 from landfill tax among Europe countries. Compared to France, where the number of population is similar to the United Kingdom, it collected revenue only Euro 259million in 2010. France collected the tax for General landfill Tax Euro 15/t and for General incineration tax EURO 7/t in 2009. I could not find direct marginal damage from the regulation taxation; however, by comparing data from other countries such as Netherland and France, the United Kingdom might need to consider of reducing tax in order to make it less the burden of paying greedy landfilled waste tax for business and local municipality in the United Kingdom.

Reference

1.http://scp.eionet.europa.eu/publications/WP2012_1/wp/WP2012_1

2.http://economicinstruments.com/index.php/solid-waste?start=40

3.http://www.soccerline.co.kr/slboard/view.php?code=totalboard&uid=1992866054