Localis, an independent think-tank, has published a report today calling for the reform of landfill tax in order to reduce waste crime and pollution. Titled “Cleaning up our act – reforming landfill tax for place resilience and best local outcomes,” the report argues that the current tax system allows for a significant gap between standard and lower rates, leading to an increase in waste crime such as illegal dumping and fly-tipping.
According to the report, waste crime costs the country over £1bn each year and is on the rise. However, enforcement efforts are disjointed, allowing organized criminals to exploit loopholes and absorb small fines as part of their operation costs. It is estimated that the tax gap for landfill tax is 22.7 percent, equivalent to £200m, suggesting high levels of tax evasion and avoidance by criminal operators.
To address this issue, the report recommends the introduction of an intermediate tax band to bridge the gap between standard and lower rates, thereby reducing the incentive for misclassification of waste. The report also calls for an increased budget for the Environment Agency to prosecute waste criminals, as well as enhanced powers for local councils to enforce waste regulations and impose higher fines and penalties for fly-tipping. The revenues from these fines would support local clean-up efforts and the development of landfill sites.
Jonathan Werran, chief executive of Localis, stated that waste crime is damaging to the environment and imposes additional costs on already struggling councils. He emphasized the need for reform and rigorous enforcement to combat organized gangs.
John Rauch, CEO of Augean, a leading UK operator of sustainable waste management services, welcomed the report and its acknowledgement that some hazardous materials will always need to be sent to landfill. He described the report as an important contribution to the discussion on the future of landfill tax in sustainable waste management.
The report also recommends incorporating the waste hierarchy into landfill tax reform to incentivize sustainable disposal choices for non-hazardous and biodegradable waste. It also calls for a portion of landfill tax revenues to be allocated towards research and development for waste recovery, as well as funding for the prevention of waste crime.
In addition, the report suggests that the government increase transparency and efficiency in tax collection to combat high levels of tax evasion and avoidance. This could be achieved through stricter enforcement measures and improved monitoring technologies.
The report, available for download on the Localis website, highlights the need for urgent action to address waste crime and pollution in the UK. It also emphasizes the importance of a collaborative effort between government, local authorities, and private organizations to create a more resilient and sustainable waste management system.
Derick is an experienced reporter having held multiple senior roles for large publishers across Europe. Specialist subjects include small business and financial emerging markets.