Sri Lanka: Taxing poor to clear the e-waste of rich

Posted on August 3, 2008 / 7 Comments

Two thousand and five hundred years ago, Gautama Buddha correlated tax collectors to bees. A righteous ruler, said he, taking the Liccavis as an example, collects tax without making it a burden on people, in the same was a bee collects honey from a flower (without damaging it).

Such wise words were not always heeded.

Four new levies, reported Financial Times today, will come into force this month under the Environmental Conservation Levy Act No. 8 of 2008.

All communication towers will be charged Rs 50,000, according to the Central Environmental Authority (CEA) Chairman Udaya Gammanpila, who explained it was done to ‘induce telecommunication companies to share the towers’.

Sharing telecom towers is good, but if Mr. Chairman thinks that happens just by forcing them to pay for erecting towers, he is wrong. Had cost been the issue, sharing would have already happened, given the high cost of tower erection – from leasing the land to bribing authorities of all levels. Further if the CEA’s concern was reducing the numbers it could have been done more effectively working together with Telecommunication Regulatory Authority of Sri Lanka (TRCSL). That is how it happens in other countries. They could have learnt from the recent attempts by Bangladesh Telecommunication Regulatory commission.

Perhaps TRCSL is too busy with monitoring porn. So this will levy be eventually paid by the mobile and CDMA subscribers.

If that is not enough, mobile phones will further be levied two percent of their monthly bills. (Even without this mobile users pay 26 cents as tax for every Rs. 1 usage – the ratio among the highest in the world) The funds such generated will supposedly be used to build an e-waste recycling plant. Says CEA Chairman: “Currently we do not have such a facility and users dispose of their old mobile phones improperly, causing damage to the environment.”

We anticipate CEA Chairman to be better informed than we are in environmental matters. All we know is used mobile phones are not an environmental concern in Sri Lanka. Recycling firms confirm it is only rarely they find a mobile phone discarded. When Dialog Telekom initiated an island-wide drive to collect used mobiles (with attractive cash prices) they could not gather even a hundred.

So we can only assume if at all another recycle plant is needed, it is for the other forms of e-waste. Parts of all types of electronic goods including televisions, radios, washing machines, refrigerators, air conditioners, sound systems and computers are being added to the environment in bulk. We fully agree. That is the environmental concern.

However almost all of these are luxury goods while mobile and CDMA phones are increasingly used by the poor. So why should poor pay for clearing the e-waste of the rich? Why not impose an environmental levy on all electronic goods?

May CEA Chairman please explain?

7 Comments

Rohan Samarajiva
August 3, 2008, 10:33 pm
Contrary to Mr Gammanpila’s claim that “these taxes are not meant as income for the government but intended to change the behavioral patterns of the consumers to make them more environmentally friendly,” his Minister was reported in last week’s Lankadeepa as saying that the levy revenues would be used to hire more wildlife officers (of course, loyal to the Jatika Hela Urumaya).
Ooru Meeya
August 6, 2008, 7:14 am
These taxes were introduced without any public discussion and debate, transforming the environment ministry into another revenue collection government entity. It raises deep concerns, among them:

1. Exactly what is the method of collection, and is the ministry lawfully empowered to collect revenue in this manner? If not, can it be challenged?

2. Why tax mobile phones ONLY, when they do exactly the same functions as fixed phones but offer the value-added premium of mobility?

3. Isn’t it a bit too late in the day to insist that telecom operators share towers when most of them have put up their own?

4. Behaviour change is a complex science and art, and not something a government agency can legislate or regulate. Is the tax money collected going to be squandered on unimaginative propaganda campaign (probably awarded to Triad agency?) that will have no effect at all on consumer behaviour?

5. Dialog Telekom’s take-back initiative for discarded and unuseable mobile phones and batteries has the CEA as technical advisor. After a slow start, it is picking up and now over 10,000 units have been collected. So what’s the problem that this tax claims to address? Or is this another ruse to force people to part with their hard-earned money?
Chanuka Wattegama
August 6, 2008, 8:43 am
Here is the latest information we receive from Dialog Telekom.

1. So far Dialog has collected 11,400 mobile phones. (We stand corrected. Our figure was few months old. Apologies)

2. Dialog exports this in bulk for recycling. It comes to about 1 metric ton. (So it is NOT released to the environment)

3. With their best efforts Dialog thinks the maximum number of phones that can collect is 100,000 per annum. ie. 10 metric tons.

4. If this target is achieved, a local recycling plant makes sense. The breakeven is 100 used mobiles a day. (or 3.6 metric tons per annum) Otherwise it is not worth the effort.

5. Mobiles are getting increasingly smaller. So the breakeven figure will increase in future.

In short this means, although our initial figure was outdated, our argument still stands.

We eagerly anticipate CEA Chairman Mr. Udaya Gammanpila to justify his claim that we need a mobile recycling plant operated by government to recycle the ‘large number of mobiles’ released to environment.
Chanuka Wattegama
August 6, 2008, 8:52 am
We reproduce the following report verbatim from http://www.sinhala.net. Did not know Vasudeva and Wickramabahu commented on it.

[COLOMBO, SinhalaNet 2008.08.06 06:43AM] Chairman of the Central Environmental Authority Udaya Gammanpila answering all criticism levelled against him and the Environment Ministry for slapping a two per cent levy on the monthly bills of mobile phone users, yesterday said that the Bill was “progressive” by all means because it deals explicitly with mobile phone users and not with non-user village folk.

He said the Central Environment Authority introduced the levy under the Environmental Conservation Tax Act 2008 in keeping with the Rio Protocol of the first Earth Summit held in Rio De Janeiro in 1992, which Sri Lanka was a signatory, on the polluter pays basis.

Gammanpila was speaking at a press conference held at the Central Environmental Authority in Battaramulla. The tax aims to make the users of mobile devices as well as the public more perceptive and sensitive about the environment, not to make money to sustain the Central Environment Authority, he said.

“The Central Environment Authority can very well look up to the Treasury for the funds and live on its allocations and it can do well without any funds being drawn from a two per cent mobile phone tax,”he added.

“The tax is a progressive because it will exclude non-handset holders who are village folk. Hence we believe that leftists like Vasudeva Nanayakkara and Wickremebahu Karunaratna will support our tax scheme imposed on mobile phone users.”

Explaining what they would do with the tax money , Gammanpila said, “we expect to set up a scheme for collecting , recycling and safe disposal of mobile phones with the use of funds collected through our Environmental Conservation Tax Bill”.

Mobile phones and their accessories contain poisonous substances including Cadmium, Rhodium, Palladium, Beryllium and Lead Solder which are among the ten most dangerous substances known to mankind.

He said, the neighbouring countries, India and Singapore have their own Recycling centres for the safe disposal of mobile phones which contain environmentally dangerous electronic substances. “Sri Lanka too needs a mobile phone Recycling and Management facility for the safe disposal of dangerous accessories in them.”

There is criticism level led He said with the environmental conservation tax of two percent being imposed on that avarice , the mobile phone user pays around Rs. 20, an amount which is less than what he or she has to pay for a pound of bread.
chanux
August 26, 2008, 12:25 pm
I pay 30 cents per rupee now on Mobitel.

Making the mobile companies share the towers is good but I think its too late now. And taxes on the companies means taxes on subscribers ultimately. Government do not want to go for a better way of doing it because all they want is another way of making money to maintain their heaven.
Rohan Samarajiva
August 28, 2009, 4:17 pm
The CEA admits that the LK market is too small for recycling mobile phones and states that its focus is on exporting the discarded phones: http://www.lbo.lk/fullstory.php?nid=124865301. Mr Udaya Gammanpila, now Minister in the Western Province and then Chairman of the CEA, should apologize for stating falsehoods in his debate in the Lankadeepa with me. But then I do not expect an apology from a person who did not take up my challenge to debate the envilevy on TV.
Alpha
August 28, 2009, 8:13 pm
Will refurbished computers imported from the West consider as e-waste? Will they be banned too?