Environmental tax should benefit the environment - not be a cash cow for the government
The purpose of an environmental tax must be to drive change towards environmental goals, not to generate continuous revenue for the state. Dressing up fiscal taxes in environmental arguments risks undermining confidence in both the tax instrument and the policy, and it does not benefit the environment either.
In their investigation of the electronics tax, the Swedish Chemicals Agency and the Swedish Tax Agency have concluded that it has not had the intended effect of reducing the introduction of hazardous substances into people's home environment and thus protecting human health. The authorities note that the tax is difficult to administer, both for companies and authorities, and have therefore presented proposals on how the tax could have a better effect.
So what does the government do? Well, it writes off the accounts against the budget bill without further action and proposes an annual increase of two percentage points in the tax taking into account the development of GDP, in addition to the change linked to the consumer price index (CPI) that is already being made. This is a new and additional increase in taxes beyond what was first legislated. Such an upward adjustment would mean that the over-indexing over 20 years would result in a 50% increase in taxes without any new decisions being taken by Parliament.This is both unfortunate and worrying.
The political discussion and direction regarding environmental taxes must be based more on science and less on wishful thinking and symbolic politics. Introducing an over-indexing of a tax, which does not fulfill its function as an environmental control instrument, is the wrong way forward if the aim is to promote the environment and not weaken the competitiveness of companies in Sweden.
We also say the following again - TechSverige and our members naturally support the work on substitution of hazardous substances in products in the industry. But it is clear that the purpose of the law and the tax to try to stimulate the taxed companies to use safer chemical alternatives is not achieved with a Swedish national tax on electronics because the goods are manufactured for a global market.
It is at the international level that these issues must be addressed, and Sweden should be a driving force in the work on substitution. Harmonized legislation in the EU's internal market avoids unnecessary administrative work where companies have to adapt products to each individual country's requirements.
A law must achieve the purpose for which it was enacted, otherwise it should be abolished, and that is what should happen with the electronics tax. There are no well-founded arguments to the contrary in this case. If the tax is to be retained, it must be adjusted to lead to positive environmental impacts. The industries concerned are in resounding agreement on this.
Frida Faxborn
Economic policy expert
Footnote: On February 8, the Ministry of Finance published the consultation paper A simpler and clearer chemicals tax (2022/00478). The memorandum proposes several simplifications of the tax on chemicals in certain electronics. TechSverige has been invited to submit comments on the consultation.