On September 11, 2019, the House of Representatives approved the Law on Integral Waste Management. This project, which was submitted in June 2018 by the Executive Branch, presents a new scenario in this area with important changes for all actors and operators.

The guiding purpose of the law is the minimization of waste generation through the search for efficiency in production processes, encouraging subsidiary reuse and recovery through recycling. In the scale of possibilities follow the energy recovery and other forms of waste recovery. The last option in any case will be the final provision which must be done trying to mitigate or compensate for negative environmental impacts.

New products taxed by IMESI are incorporated as a way to finance the implementation of waste management programs.

The New Law covers all waste regardless of its type and origin, with the exception of radioactive waste and waste generated in mining exploration or exploitation, when they can be managed at the site where the mining activity takes place.

The law includes solid or semi-solid waste, as well as those in the liquid or gaseous phase, which due to their physicochemical characteristics cannot be entered into traditional systems for the treatment of spills or emissions.

In the classification of waste made by law, special waste is defined, among others: Art. 5 ° Lit H) “ 1) packaging and packaging waste whatever its origin or function. 2) other plastic waste other than containers and packaging ”.

The general principle of liability for which the law has opted is that of the generator's responsibility, associated with the concept of polluter-payer. In this sense, it establishes that any waste generator of any kind will be responsible for managing them at all stages, except for the exceptions established by law (art 7).

This responsibility extends in the case of manufacturers and importers of special waste, beyond its delivery to the merchant or consumer. At this point a modality of responsibility is adopted which is known as Extended Responsibility and which is regulated in art. 41. (Extended responsibility ) .- “The extended responsibility of the manufacturer and importer in the management of special waste is established, except in those cases in which, as provided in this law, the products to be taxed by the Internal Specific Tax from which they are generated ”.

This article was one of the most analyzed in the parliamentary process and the one that generated the most discussions, given the increase in the tax burden involved, the eventuality of increased costs for the final consumer and the obligatory nature of the system even in the face of recycling options or valuation that manufacturers and importers could assume.

Tax modifications included in the New Law

With the New Law, important changes are established in the IMESI, with its implementation waiting for the Executive Branch to approve the decree that establishes the amounts and aliquots of the IMESI that will be applicable and the conditions for obtaining tax credit.

The first transfer to any title and the impact on own use, made by the manufacturers and importers of the following goods, whose fixed amount per unit disposed of or the IMESI rate will be set by the Executive Power, will be taxed by IMESI maximums mentioned below in each case:

A. Containers, excluding those of literal B below.

The IMESI will be established on the basis of a fixed amount per disposed physical unit, with a maximum of 10 Indexed Units (“UI”, today $ 4,2665 IU) per kilogram.

B. Other products, for which the following maximum rates are expected to be applied on the sale price (without taxes) of the manufacturer or importer:

• Disposable trays and boxes used to contain products: 180%
• Plastic film: 20%
• Glasses, plates, cutlery, sorbets and other disposable tableware or utensils: 180%
• Single-use plastic bags to transport and contain goods: 180%

The Executive Power may set rates and differential amounts considering the type of material, volume, weight, feasibility of recycling and the environmental impact associated with the different products.

In those cases that the manufacturer or importer transfers to a distributor more than 25% of the total monthly sales of the goods of the same numeral, or when without reaching said percentage the manufacturer or importer and the distributor are related entities, the taxable amount will be the sale price of the distributor.

On the other hand, the New Law provides that in the importation of packaged goods, the packages containing them will be taxed by IMESI, as established by the Executive Power.

This tax will be final and will be determined as a fixed amount per imported physical unit, with a maximum value of 10 IU per kilogram.

Finally, two situations are foreseen in which the Executive Branch may grant fiscal credit:

• To manufacturers and importers who use returnable containers for the commercialization of goods and provided that the returnability of the containers is accredited through certificates issued by the National Environment Directorate (DINAMA).
• To the entities that implement systems for collecting or recycling the goods mentioned in literals A and B above, who must prove the effectiveness of these systems through certificates issued by DINAMA.

The amount of the tax credit may not exceed the IMESI corresponding to returnable containers or disposable goods that are collected or recycled.

Coexistence of the New Law with the Packaging Law

In the original wording of the bill, the repeal of Packaging Law No. 17.849 was expressly established, replacing the management mechanism and the rate that companies pay to the trust that operates in the private sphere. However, this was not included in the approved text.

As mentioned above, the New Law incorporates some products taxed by IMESI and excludes the extended liability in “ those cases in which, as provided in this law, the products from which they are generated are taxed by the Internal Specific Tax”.

In the case of Packaging, IMESI will be determined on the basis of a fixed amount per unit disposed of, whose maximum value will be 10 IU per kilogram.

That is to say that a priori there are two opposing systems: the obligation that is imposed in arts. 4th and 5th of Law 17,849 would remain in force (CIU Trust) and on the other hand, an IMESI would be imposed on the same containers that are ordered to be managed.

However, we must understand that art. 6 of the Packaging Law also remains in force and enables the concretion of Alternative Management Plans. And on the other hand, the New Law provides that manufacturers and importers, although they will have to pay the corresponding IMESI, will be able to implement collection or recycling systems for any of the goods taxed by IMESI or systems that accredit the returnability of returnable containers. , which enables them to recover IMESI through the tax credit provided for in the New Law.

That is to say, if the regulation of the New Law enables it, the tax cost can be optimized through the implementation of appropriate plans for the management of the Containers.

(Management plans Art. 6 Packaging Law) .- “The management plans for used packaging and packaging waste referred to in the previous article, must provide in its scope, the fulfillment of the objectives of reduction, returnability, recycling and valuation, in the percentages and deadlines that are established.

These plans may include voluntary systems of returnability, promotion instruments thereof and also the establishment of collection mechanisms of an individualized and uniform amount for all square stores, as a deposit or sign, for each container that is the subject of the transaction .

For the approval of the management plans, the Ministry of Housing, Territorial Planning and Environment will take into account their possibilities of integration with existing ones or to be created, tending to the formation of integrated systems for similar and compatible packages. In any case, adequate conditions of competition will be favored, especially considering small and medium enterprises. ”

National Waste Management Fund

The executive branch is authorized to establish an administration trust as established by Law No. 17,703 of October 27, 2003, which will be called the National Waste Management Fund (FONAGRES), in order to finance the management programs for Special waste and support the improvement of waste management by departmental governments.

To this trust will be transferred the amounts collected for the increase of IMESI.

Adjustment period

Finally, we point out that the New Law establishes a maximum term for the adaptation of the different subjects involved in the waste marketing chain to what is established in this law and its regulations, will be three years from the entry into force of this law (art 29).

Message to the executive branch

It is of interest to note that together with the approval of the Law, the following minutes of communication with the vote of all the Deputies present were approved for the EP to take into account at the time of the regulation:

 “The House of Representatives requests the Executive Branch to keep in mind in the regulations of the law on integral waste management the following matters:

1) That the systems of returnability of the packages be specially promoted, that the glass container be privileged in fiscal treatment over other options, without affecting the national container compared to the imported one, that the funds raised by IMESI to the defined products in article 42 they are destined in their entirety to the FONAGRES avoiding that they can be indiscriminate in the general income of the State. ”

In the following link you can find the complete approved text: CLICK HERE .