Debate: Government proposal on chemicals tax hits jobs in Sweden

A chemicals tax on electrical and electronic products will unfortunately not lead to positive effects for the environment or health. In the worst case, the tax will have the opposite effect and lead to the disappearance of Swedish jobs, write members of the IT&Telecom Companies' Sustainability Council together with representatives of a total of nine companies.

The government is currently working on a proposal for a new chemicals tax on electrical and electronic products. Unfortunately, the tax will not have the intended environmental benefit and, at worst, will have the opposite effect. Consumers will be hit by higher prices, competition will be distorted, the proposal will hit the Swedish electronics industry and trade hard, and thus Swedish jobs.

The tax is said to be aimed at removing harmful flame retardants used in plastic components and circuit boards to ensure fire and product safety requirements. These components are found in everything from computers and mobile phones to dishwashers and refrigerators. The problem, simply put, is that the tax will have no impact on this, and will instead put obstacles in the way of Swedish companies.

The way the tax is currently structured is akin to a rush job. The rules that determine whether or not tax is payable are unworkable and will cause major problems for both businesses and the Swedish Tax Agency. The proposal has major shortcomings in terms of predictability and legal certainty. The wording suggests that the real intention of the proposal is to strengthen the treasury, not to create an incentive to remove unwanted chemicals from products.

The proposal is not based on scientific evidence regarding the environmental and health properties of chemicals. Moreover, the tax risks being counterproductive. A cost increase of at least SEK 400 (tax plus VAT) for white goods will make people stick to their old washing machine or freezer for longer and when it is necessary to change the product, consumers will choose products with a lower energy class to cope with the cost increase.

The tax will distort competition in two ways: companies that truthfully declare the chemical content of their products will be at a disadvantage compared to less scrupulous operators who falsely claim that the products do not contain the taxed chemicals, which cannot be verified because there is no measurement method. In addition, Swedish companies that sell products in Sweden are disadvantaged compared to companies that sell directly to consumers from abroad, for example via the internet, as products that consumers themselves import to Sweden are exempt from the tax.

The tax is estimated to generate 2.4 billion in revenue annually, but only applies to products manufactured or sold in Sweden. Already today, one in five packages distributed to Swedish customers from e-commerce is from foreign companies. Depending on the product category, up to 25 percent of Swedes' electronics are purchased online. These figures are increasing, and will of course increase further if products sold in Sweden unilaterally increase in price. This will affect Swedish consumers and retailers.

If we are serious about limiting the use of inappropriate chemicals, we should instead continue to work towards phasing out unwanted chemicals at EU level. Public procurement criteria, voluntary measures and clear information aimed at healthy competition have also proved very effective.

Last fall, Minister of Trade and Industry Mikael Damberg proposed an export strategy. Now, the government is proposing a strategy that will have a negative impact on the import of products to Sweden. The electronics trade will move to foreign webshops and the Swedish electronics industry will be replaced by foreign ones - here the government proposes almost an "import strategy"? Swedish jobs will disappear without any positive effects on the environment or health being demonstrated. Was that the intention, government?

Andreas Viefhaus, CEO, Electrolux

Mikael Dahnelius, CEO, Kjell & Company

Karl-Gustav Ramström, CEO, Prevas

Åsa Portnoff Sundström, Sustainability Manager, Clas Ohlson

Hans Wendschlag, Sustainability Manager, Hewlett-Packard

Henrik Sondell, Sustainability and Environmental Manager, LG Electronics

Jhonny Bergman, Vice President, BSH Home Appliances

Kent Oderud, CEO, Miele

Thomas Hedin, Environmental Affairs Manager, Lenovo (Sweden)