Environment Minister Upholds MVR 2 Plastic Bag Fee in Committee Hearing

During a parliamentary committee session on Monday, Environment Minister Thoriq Ibrahim affirmed his stance against reducing the MVR 2 tax on each plastic bag. The committee, tasked with reviewing amendments to the Waste Management Act, specifically addressed concerns regarding the escalated cost of plastic bags.

The proposed amendments present two options related to the bag tax:

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1. Reduce the fee from MVR 2 to 50 Laari.
2. Eliminate the bag tax.

Committee members sought clarity on the government’s perspective. Minister Thoriq clarified that the plastic bag tax had not undergone policy-level discussions within the ministry and the new government. He stated that maintaining the current MVR 2 fee is manageable while reducing it to 50 Laari could introduce complications.

Thoriq elaborated on the government’s ongoing efforts to formulate regulations for allocating funds collected through the plastic¬†bag tax. He underscored the importance of deliberations before altering the existing law, emphasising the designated use of tax revenue through the Environmental Protection Agency (EPA).

The minister advocated for retaining the MVR 2 charge per bag at the consumer level, stating that it aligns with government objectives. Finance Ministry officials echoed this sentiment, warning that a reduction below MVR 2 might undermine the tax’s purpose and may not effectively discourage plastic bag usage.

Addressing concerns of potential double taxation, Thoriq expressed support for an amendment exempting the fee from a 50-bag pack. Commissioner General of Taxation at MIRA, Fathullah Jameel, proposed a more permanent solution through deducting input and output tax, aligning it with GST payments.

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