REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
QUEZON CITY

FIFTEENTH CONGRESS
FIRST REGULAR SESSION

H.B.NO 127

Introduced by HON. AL FRANCIS C. BICHARA

EXPLANATORY NOTE

During this period of great environmental crisis as we face the effects of global
warming, there is a growing international movement seeking to ban and discourage the
use of plastic bags because of their environmental effects. Studies have shown that plastic
bags have significant environmental impact as plastic waste kills up to One (1) Mil'ion
sea bh rds, One Hundred Thousand (100,000) sea mammals and count'ess fish each year.
A person’s use of plastic oags may be counted in minutes but plastic bags takes between
15 years to 1,000 years to breakdown in the environment.

We cannot deny the long list of disadvantages in the use of plastic bags. Aside
from the fact that plastic bags are made of “petrochemicals”—a non-renewable resource,
plastic bags are not biodegradable. The unrestrained usage of plastic bags and the existing
practice in their disposal hampers the efforts of our Government to protect our
environment through proner garbage disposal system. Furthermore, littered plastic bags
may clog roadside drains which may cause street flooding during heavy rainfall. In fact,
plastic bag litter is a universal problem. It can even be found as far north as Spitsbergen
(78° North Latitude) and as far south as Falklands (51° South Latitude). In Africa, cottage
industry groups are harvesting about 30,000 bags each per month, out of windblown
plastic bags.

At present, Governments in several countries and major cities, like Australia,
China, Ireland, Bangladesh, Paris, Italy, Taiwan and Tanzania, have banned or taken
action to discourage the use of plastic bags. Needles to state, the Government has a duty
to protect the natural environment, and should take an active role in safeguarding the
health of its citizens.

This bill seeks to discourage the use of plastic bags through the imposition of a
levy which shall be specifically used to fund efforts to protect our environment, promote
sust: inable development and combat the pernicious effects of the wantan destruction of
our natural resources.

In view of the foregoing considerations, approval of thy billds requasyed.

4 Nry

AL FRANGAS C. BICHARA
2™ District, Albay


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HBNo,__ 127

Introduced by HON. AL FRANCIS C, BICHARA

AN ACT IMPOSING AN EXCISE TAX, TO BE KNOWN AS.
)VIRONMENTAL LEVY” ON THE USE OF PLASTIC BAGS IN SHOPS,
SU! ERMARKETS, SERVICE STATIONS, STORES AND/OR SALES OUTLETS,

CREATING THE ENVIRONMENTAL PROTECTION SUPPORT FUND, AND
FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippities in
Congress assembled:

Section 1. Imposition of levy, persons liable, rate of levy.—There shall be levied,
assessed and collected a tax in the amount of Two Pesos and Fifty Centavos (P2.50), to
be known as “environmental levy”, against customers, for every “plastic bag” used at the
poirt of sale to them of goods or products to be place¢ in said plastic bags, in or at any
shop, supermarket, service station, store and/or sales outlets with an annual compensation
incorne of at least One Hundred Thousand Pesos (P100,000.00) during the preceding year
prior to the effectivity of this Act, and/or with a minimum capitelization of at least One
Hundred Thousand Pesos (P100,000.00), as provided for in its business registration.

Section 2. No levy for paper bags and/or plastic bags brought in by customer.—
No customer shall pay an excise on: .
(a) paper bags;
(b) customer's own plastic bag thet he or she brought into the store and uses to
carry purchascd items from the store;
(©) any bag if the customer requests that plastic bag shall not be used.

Section 3. Excepted bags—Only plastic bags which are used as o-iginal
packaging of the following products are excepted from the definition of plastic bags:

(a) plastic bags used to contain—
() fresh fish and fresh fish products;
(ii) fresh meat and fresh meat products; or
(iii) fresh poultry and fresh poultry products

Provided that such bags are not greater in dimension than two hundred
twenty five millimeters (225mm.) in width (exclusive of any gussets), by three
hundred forty five millimeters (345mra.) in depth (inclusive of any gussets), by
four hundred fifty millimeters (450mm.) in length (inclusive of handles).

(b) plastic bags solely used to contain—
(i) fruits, nuts or vegetab es,
(ii) confectionery,
(iii) dairy products,


(iv) cooked food, whether cold or hot, or

(vy) ice

Provided that such excepted bags shall be accordingly labeled to be
exclusively used for such purpose. Provided further, that such bags are not ercater
in dimension than the dimensions referred to in paragraph (a).

For purposes of this section, “original packaging” means, an enclosed plastic bag
in which loose produce is placed by the manufacturer, and/or producer for purposes of
transport, warehousing, logistics, sale and/or end use.

Section 4. No free plastic bags in shops, supermarkets, service stations, or other
sales outlets.—Except for those provided in Section 2 hereof, no shop, supermarket,
service station, store, and/or sales outlets shall provide plastic bags free of charge.

Section 5. Who shall impose the charge.—The owner of any shop, stpermarket,
service station or other sales outlet specified in Section 1 of this Act, cr any person
authorized by said owner, including an employee, sales clerk, cashier and/or store
representative, shall impose a charge equivalent to the amount of the levy on a customer
for every plastic bag issued to the customer, other than a plastic bag excepted under
Section 2 hereof. The owner of said establishment or any person authorized thereto shall
be ¢ msidered the collecting agent of the Government.

Section 6. Jtemization of levy.—Where a charge under Sec'ion 1 is impose 4, the
charge shall be itemized on any invoice, receipt or docket issued to the customer by the
sho}), supermarket, service station, store, and/or sales outlet specified in Section | of this
Act.

Section 7. Return and payment of the levy.—

(a) The owner of a shop, supermarket, service station, store and/or sales outlet
specified in Section 1, or any accountable person of said shop, supermarket,
service station, store and/or sales outlet, shall, upon filing of its income tax
return, in addition thereto, file a full and true return, in such form as may be
specified by the Commissioner of Internal Revenue, of the amount of the
“environmental levy” which became payable by him or her during the
accounting period. The amount shal! be paid upon filing of the said return;

(b) Notwithstanding the provisions of subsection (a) hereof, the Commissioner
may from time to time, by notice in writing, require the owner of a shop,
supermarket, service station, store and/or sales outlet specified in Section 1, or
any accountable person of said shop, supermarket, service station, store and/or
sales outlet, to file a full and true return, within thirty (30) days from said
notice, in such form as may be specified by the Commissioner of Internal
Revenue, of the amount of the “environmental levy” which became payable
by him or her during the period specified in the notice. The amount shall be
paid upon filing of the said return

Section 8. inventory of plastic bag issued to shops, supermarkets, service
stations, stores and/or sales outlets. —

(a) The owner of a shop, supermarket, service station, store and/or sales outlet
specified in Section 1, or any accountable person of said shop, supermarket,
service station, store and/or sles outlet shall keep in a permanent form a full
and true record of:

(the number of plastic bags, other than those excepted from the
detinition of plastic bag by reason of Section 3 of this Aci, in stock


betisre the commencement of business, thirty (30) days after approval
of this Act;

(ii) the number of plastic bags, excepted from the definition of plastic bag
by reason of Section 3 of this Act, in stock before the commencement
of business, thirty (30) days after approval of this Act;

(iii) the number of plastic bags, other than those excepted from the
definition of plastic bag by reason of Section 3 of this Act, purchased
by him or her in each accounting period;

(iv) the number of plastic bags excepted from the definition of plastic bag
by reason of Section 3 of this Act, purchased or acquired by him or her
in each accounting period;

(v) the number of plastic ba
of plastic bag by r
her to customers in ¢:

xcepted by the definition
on of Section 3 of this Act, supplied by him or
h accounting period

(b) The owner of a shop, supermarket, service station, store and/or sales outlet
specified in Section 1, or any accountable person of said shop, supermarket,
service station, store and/or sales outlet shall retain the records referred to in
subsection (a), together with all other books and documents containing
particulars on which the records are based, for a period of not less than five
(5) years.

Section 9. Remedy of Commissioner in case of non-filing of the required
return—

(a) If within the period specified in Section 8 of this Act, the owner of a shop,
supermarket, service station, store and/or sales outlet specified in Section 1, or
any accountable person of said shop, supermarket, service station, store and/or
sales outlet, fails to furnish a return in respect of any period, then without
prejudice to ai.y other action which may be taken by the Commissioner under
the National Internal Revenue Code, the Commissioner may estimate the
amount of the “environmental levy” payable by that peison in respect of that
period and serve notice on that person of the amount estimated; :

(b) The owner of said establishment or any accountable person of said
establishment shall be given fifteen (15) days from the date of notice to
contest the estimate provided by the Commissioner and shall file the
appropriate retum and pay the “environmental levy” due in accordane= with
the return filed;

(©) Upon the expiration of the fifteen (15) day period and no return is filed b the
‘owner of the establishment or any accountable person of said establishment,
the estimated amount of the “environmental levy” as specified in the notice
shall become due and payable as if the levy was the actual :.nount to which
the person was liable to pay for the accounting pericd.

Section 10. Remedy of Commissioner for non-payment of “environmental
levy”. —Without prejudice to any other mode of recovery, the provisions of the National
Internal Revenue Code, specifically Title VII thereof, shall apply to the recovery of any
levy payable under this Act.

Section 11. “Environmental Levy” to be allocated to the Department of
Environment and Natural Resources (DENR) budget.—All sums received pursuant to the
“environmental levy” imposed by this Act shall accrue to the “Environmental Protection
Support Fund” , which shall be automatically allocated to the DENR, through the Annual
General Appropriations Bill.


Section 12. “Environmental Levy” to be used as “Environmental Protection
Support Fund”. —All sums received pursuant to the “environmental levy” imposed by
this Act shall accrue to the “Environmental Protection Support Fund”, the proceeds of
which is to be used for the following purposes:

(a) to contribute to the protection of the environment and to limit the efiects of
regional and global pollution in the country;

(b) to provide technical and financial tools for industries and investments to
enhance their environmental protection systems;

(c) to improve on-the-ground environmental improvement activities for poor
communities with’ emphasis on biodiversity conservation, community
environmental management, livelihood enhancement and promotion of
ecotourism;

(d) to fund projects that clean up pollution in lakes, ponds, rivers, and streams
thereby improving the health of the country’s waterways;

(€) to provide funding to local government units to enhance their solid waste
recycling efforts;

(f) to develop and enhance the solid waste management plan of our country’;

(g) to promote alternative means of solid waste disposal system

(h) to sponsor efficient waste collection system;

(i) for such other purposes consistent with the objectives of this Act.

Section 13. Rules and Regulations—The Secretary of Finance, upon
recommendation of the Commissioner of Internal Revenue, shall promulgate the rules
and regulations to effectively implement this Act.

Section 14, Repealing Clause —The provisions of any law, whether general or
special, rules and regulations and other issuances or parts thereof which are inconsistent
with this Act are hereby repealed, amended or modified accordingly.

Section 15. Effectivity —This Act shall take effect upon its approval.

Apr roved.