Emerging economies are more likely to use incentives than penalties to encourage recycling, an international comparison by KPMG has found.
The accountancy firm compared tax regimes in different countries and their impact in encouraging reuse or recycling of materials.
It said that governments around the world, both national and local, had over the past 20 years become more innovative in using tax and other fiscal instruments to conserve material resources, reduce waste and encourage the reuse and recycling of waste materials.
Of the countries analysed, incentives for efficient use of materials or waste recycling were part of the national tax code in South Korea, China, Brazil and South Africa.
By contrast, European countries “appear to focus on penalties rather than incentives in this area”, the survey said. The US also based its approach on incentives.
At one extreme, France has a system based entirely on penalties and without incentives, with a tax on the removal of refuse from buildings liable to property tax (except factories), and on the recovery and elimination of both paper and electronic waste.
China proved unusual in taxing the use of certain minerals, including iron and tin ore because of an objective of conserving domestic mineral resources and the environment. Molybdenum, magnesium, talc and boron are also taxed.
Incentives are also offered, with KPMG citing the example of reduced or no VAT on goods produced from recycled materials. Qualifying goods include sand produced from construction waste, powdered rubber made from obsolete tires and electricity or heat produced from organic waste.
The survey also noted that landfill taxes were “relatively common across the globe”.