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Plastic tax would have low economic impact

August 12, 2019 by Staff News Writer

A study by the United Nations Development Program (UNDP) and the Research Institute in Economic Sciences (IICE) of the University of Costa Rica (UCR), announced that putting a tax on plastic would have Low economic impact.

Since the effects of the tax depend on the ability of people to react, the research focuses on possible scenarios to estimate the negative effects on markets and the economy. The worst case scenario assumes that tax costs are transferred entirely to the final consumer without reducing their consumption.

The most realistic scenario implies that there is a reduction in consumption and only a part of the cost of taxes is transferred to the final consumer. The results are:

1. The effect on production in the worst case scenario would be 0.15% of GDP and in the most realistic scenario it would be 0.07% of GDP.

2. The effect on investment in the worst case scenario would be 0.20% of GDP and in the most realistic scenario it would be 0.10% of GDP.

3. The effect on consumption in the worst case scenario would be 0.09% of GDP and in the most realistic scenario it would be 0.04% of GDP.

A bill, presented by Paola Vega, aims to create what they call the “Blue Fund”, which collects for the tax on plastic products, with the aim of financing projects to revalue these items.

crhoy.com

Related articles:

  1. This is the effect of VAT on inflation
  2. Plastic in the oceans is enough to reach the Moon
  3. Central Bank: tax reform will contribute with 3.7% of GDP for 2022
  4. ICT launches campaign to reduce single-use plastic consumption
  5. Food industry denounces serious impact of fiscal plan
  6. Turrialba’s serious economic impact on agriculture

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