MEXICO CITY (June 27, 2:15 p.m. ET) — Fiscal inflexibility is restricting the development of plastics recycling in Mexico, according to national plastics industry association Anipac.
About 17 percent of the 13.9 billion pounds of plastics processed in Mexico annually is recycled, Luis Gerardo Álvarez Espinosa, Anipac's managing director, revealed at a news conference June 25.
At the same event Carlos Alberto Saldate Paton, president of Anipac's recycling section, said two plastics recycling projects proposed for Mexico City by Italian and Spanish investors and worth a total of $5 million, were canceled in 2011 because of tax issues.
Saldate is also the managing director of Spanish-Mexican recycler Comercializadora Folgueiras SA de CV, located in Mexico City. The company, he told Plastics News separately, has been planning to build two plastics recycling plants in Mexico, one in the capital and another in the Guadalajara metropolitan area.
Both projects are on hold.
“We're talking about a total investment of $2.2 million but both have been postponed until we clear up certain fiscal and other matters,” he said in Spanish.
According to Saldate, Mexico City, where 10 recycling plants are already operating, urgently needs to invest 400 million pesos ($29 million) in 10 new recycling plants to cope with demand.
The reason for Anipac's unhappiness is a 2007 federal government decision to end the recyclers' right to assess how much tax they should pay on waste bought from garbage tip scavengers or pepenadores — who don't pay taxes and do not present the recyclers with an invoice. As a result, since 2008 the recyclers have not been allowed to deduct pepenador payments for waste material from their tax bills.
The government said the self-assessment tax system for recyclers was stopped because it was being abused.
“We don't accept that,” Saldate said.
Anipac wants the government to devise a scheme whereby the pepenadores would present some kind of documentation to the recyclers.
“We're asking the authorities to apply to plastics recycling the same logic as used for agricultural and the fishing industry,” Álvarez said.
Yet, he said, three proposals for resolving the issue, supported by Anipac and other interested parties, such as iron, steel and paper recyclers, have failed to reach the voting stage in Congress in the past year.
“We think there will be progress when a new government comes in,” Saldate said. Presidential, state and municipal elections will be held across Mexico July 1, with the new national government for the 2012-2018 period taking office Dec. 1.
In a news release Álvarez said he trusted Mexico's new leaders “will pay more attention to the plastics industry.” He described the sector as “being among the biggest generators of national wealth” and added that Anipac, which stands for Asociación Nacional de Industrias del Plástico AC, will soon sign an agreement with the Mexico City government to cooperate in the recycling of the capital's plastic waste, which amounts to 1,200 metric tons a day.
In January the city government announced it would open 700 public depositories across the city of 9 million people this year to receive garbage, separate it and send it for recycling.
Anipac statistics show that Mexico City generates 12,700 tons of the 95,121 tons of total waste generated in Mexico every day. Of the national total, 52 percent is organic waste and 14 percent is paper and cardboard. Plastics are the third highest category by weight, accounting for 11 percent of the total.