The Swedish “Tax on Fashion” has been heavily criticised by Swedish organisations, companies, and the Swedish authorities such as the Swedish Tax Agency and the Swedish Chemicals Agency. Yet the criticism is not limited to Sweden; it is also international.
The Swedish “Tax on Fashion” has been heavily criticised by Swedish organisations, companies, and the Swedish authorities such as the Swedish Tax Agency and the Swedish Chemicals Agency. Yet the criticism is not limited to Sweden; it is also international.
A number of European organisations have sent a consultation response to the Ministry of Finance urging the Swedish authorities to abandon the proposed Tax on Fashion.
– This could be perceived as a non-tariff barrier and an abundance of the work it is seeking to address has already been done - and is continuing - with REACH and ECHA”, says Jérome Pero, Secretary General for Federation of the European Sporting goods Industry (FESI).
FESI members include Adidas, Nike, Converse and Puma. Together with organisations such as Independent Retail Europe, the International Wool Textile Organisation and EuroCommerce, FESI has written a response to the Referral.
– We support the goal of reducing hazardous substance use in footwear and clothes. The industry has been working on restricting the use of these chemicals for several years now. However, even if we support the cause, we fail to see how a Swedish fashion tax will have any positive impact on this work going forward.
The fact that the targets for the tax are all clothing and footwear – despite the fact that 84 percent of those products contain none of the chemicals listed - is problematic, he argues.
– This is already regulated in REACH and other EU chemical legislations. We find that the tax lacks proportionality.
The Tax on Fashion is a perfect demonstration of how Sweden is progressive in sustainably but at the same time is too impatient. Jérome Pero argues that the intent to tackle a global issue with a national tax is problematic.
– This tax contravenes both EU-regulations governing the single market and, potentially, the WTO trade regulations, he says.
– When the vast majority of the products targeted by the tax do not contain any of the listed chemicals, it cannot be justified to design trade barriers on environmental and health grounds.
The Swedish sports and sports fashion chain, Stadium, has estimated that the tax will increase its costs by more than 10 million Euro (100 million SEK) a year. This is the likely cost of the tax and the administrative costs that will be needed to prove to the authorities that they don’t have any of the listed chemicals in their products. Jérome Pero argues that the tax is going to have a negative impact on the companies sustainability work.
– The increased costs for the companies will reduce their capacity to invest in more ambitious substitution schemes. It’s going to entail increased administration and, of course, increased costs simply to prove that they don’t have any of the chemicals listed.
At the beginning of October, the Swedish Tax Agency and the Swedish Chemicals Agency”s evaluation of the electronics tax, introduced 2017, showed that that tax did not lead to any decrease in the target chemicals during the three years it has existed.
– It is problematic that the Swedish government are going ahead with a tax that already has been proven to not achieve its purpose.