Explainer: MVR 2 plastic bag tax comes into effect on Apr 18
If GST exempted goods are sold in plastic bags, the tax will still be levied on the bag
By
Aishath Fareeha Abdulla
A plastic bag tax of MVR 2 per bag, being introduced under an amendment to the Waste Management Act in November, will come into effect from Tuesday. While certain uses will be exempted from the tax, most uses of plastic bags in commercial transactions will be taxed.
According to the Fee Guide for Plastic Bags issued by the state tax agency, MIRA, and relevant regulations:
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A business that is mandatory to register for GST, but had not registered will also have to collect the tax from consumers and pay to MIRA
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If GST exempted goods are sold in plastic bags, the tax will still be levied on the bag
Exemptions
There will be no tax on plastic bags sold or given free of charge by duty-free shops.
Plastic bags used to sell fresh fish, seafood and similar goods will be exempted.
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Since frozen fish are not considered as fresh fish, plastic bags used to sell such fish will be taxed
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There will be no tax on bags used to sell chilled fish, because fish are chilled to maintain their freshness
Tax exemption will also apply to bin liners sold or issued specifically by authorised waste management companies or any other competent authority responsible for waste management.
Plastic used by manufacturers to seal and package goods will also be exempted:
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For example, plastic packaging used in frozen chicken and similar products will not be taxed
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But plastic bags used at the time of sale of packaged frozen chicken or similar products will still be taxed
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The tax will also apply to unpacked meat sold in plastic bags
There will be no tax on packets in which fried leaves, fish pastes, etc. are sealed. This is because such items are sealed to the extent required for the sale.
Conditions for tax
If a business buys and sells goods in plastic bags at promotional events, it will have to pay the tax even if the products are provided free of cost.
Restaurants and cafes will have to levy the tax if they put things like containers carrying food in plastic bags during takeaways and deliveries.
If shopkeepers sell food items like rice, sugar and flour in plastic bags, the tax will apply to the bag.
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In the staple food category, plastic packaging used by the manufacturers of items like rice, sugar and flour to package their products will be exempted
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If rice, flour, sugar are packed in plastic by a party other than the manufacture, the tax will apply
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