State to fight Dunnes’ bag levy challenge

February 1, 2010 by Infowars Ireland

By Jerome Reilly
www.independent.ie
Sunday January 31 2010

The State will mount a rigorous defence to the legal challenge by supermarket giant Dunnes Stores against a tax assessment of €36.4m arising out of the levy for plastic shopping bags.

If the Dunnes Stores challenge was successful, it could undermine the legal basis behind the entire plastic bags levy which has been copied by other countries and lauded as an outstanding contribution to safeguarding the environment.

The Sunday Independent has learned that the Government is prepared to meet the legal challenge head on. If they lose the case the option remains open to alter the legislation to make the levy legally watertight.

Last November, Dunnes received separate assessments from the Revenue Commissioners covering four years, averaging about €9m each which they are now contesting in the High Court.

The company stressed that they had no problem with the concept of a levy and supported the initiative.

Dunnes Stores are challenging the size of the tax assessment which they say includes bags used in their Northern Ireland Stores and on plastic bags used for hygiene purposes, such as for wrapping fresh meat and fish, rather than just “shopping” bags which are purchased at the checkout.

In 2007, the Revenue Commissioners collected just over €22m in plastic bag levies across the country. The amount collected has risen steadily each year since it was introduced. In its first full year in operation, 2002, just over €10m was collected. The levy is now 22¢ for each bag.

The money collected by Revenue on the plastic bag levy which has cut the use of plastic bags in Ireland by 90 per cent is ring-fenced and used solely for environmental initiatives, including waste management, recycling and other green projects, such as waste reduction schemes, operation of waste recovery activities and promotion of environmentally friendly products.

Dunnes Stores claimed in court last week that the Revenue Commissioners have served it with an assessment over a four-year accounting period for its use of bags which are not subject to the Government levy.

The supermarket chain Dunnes was given permission by the High Court to bring judicial review proceedings against the Revenue, the Environment Minister and the Attorney General.

The company wants the court to quash the assessment. Read more…