Italy's new plastics tax, which was announced as part of the budget for this year, and due to begin July 1, has been postponed.
The controversial law, aimed at reducing the production and consumption of plastic, introduces a tax of 0.45 of a euro (48 cents) per kilo of non-recyclable plastic packaging (MACSI).
That tax would cover bottles, shopping bags, polyethylene food containers, Tetra pack containers, expanded polystyrene packaging and plastic caps. Disposable packaging produced from compostable bioplastics or recycled materials, as well as packaging of medical devices, pharmaceutical or medical packaging will be exempt.
The new tax was to have been implemented via a decree this month declaring its entry into force.
However, the exceptional circumstances of the coronavirus pandemic and its unprecedented impact on the Italian economy led the government to draft and approve a new decree on May 13, known as the Decreto Rilancio or Relaunch Decree, which provides a bailout package worth 55 billion euros ($59 billion) for industries and families struggling to survive the crisis. Some 4 billion euros ($4.3 billion) in tax cuts for businesses, as well as extra subsidies, incentives and bonuses, were also announced by Prime Minister Giuseppe Conte at a news conference.
"We worked on this decree in the awareness that this is a country in great difficulty, with a community of women, of people, in great suffering," Conte said when presenting the Relaunch Decree.
The government is also aiming to simplify administrative procedures and cut back on bureaucracy. The measures, originally announced for late April, were delayed due to tensions between government coalition partners, follow an initial 25 billion euro ($27 billion) package that was passed in March.
Article 139 of the present 500-page decree specifically states that the effective date of two much-disputed taxes, both the plastics tax and a sugar tax on sweetened beverages, would be postponed to Jan, 1, 2021.
Postponing the tax will mean a loss of some 200 million euros ($215.8 million) in revenue for the Treasury: the plastic tax alone was forecast to bring in 140 million euros ($151 million) this year.
Italy is one of the worst-hit countries in the world by the COVID-19 pandemic. The Italian economy has been estimated to contract by, at the most conservative guess, 8 percent this year as a result of the current epidemic that has already killed well over 30,000 members of the country's population.
According to Reuters, the Italian treasury has predicted that the extra spending, coupled with a collapse in tax revenues, will push the budget deficit to 10.4 percent of gross domestic product this year.