The National Alliance for Local Economic Development (NALED) proposes a change in the system of payment of environmental protection fees and environmental taxes in order to ensure compliance with the ‘polluter pays’ principle and thus encourage investment in cleaner technologies.
Companies in Serbia pay a fee for the protection and improvement of the environment with fixed amounts ranging from 5,000 to two million dinars, depending on the activity and size and not on the amount based on harmful substances released into the air, waterways or soil, NALED says. This practice has so far not had the expected effect on reducing pollution, which is why NALED is proposing a different pricing policy.
Almost half of the industries that emit nitrogen oxides are not obliged to pay any fines, fees or environmental tax nor are any ammonia emitters from the agricultural sector or industry that emits huge amounts of carbon dioxide. In order to ensure compliance with the “polluter pays” principle, as a first step, NALED proposes to integrate the existing levies into a single pollution tax.
“The fee for environmental protection and improvement is currently a flat rate, which does not take into account the actual amount of harmful gas emissions. It is also paradoxical that a company invests in environmental protection by building a waste water plant, installing filters or using cleaner fuels, and this is not taken into account in the calculation of the fee,” says Jelena Kiš, president of the Alliance for Environmental Protection at NALED.
According to her, for other companies that pollute a lot and do not invest in environmental protection, this fee does not provide any incentives to change their way of doing business, because whatever companies do and regardless of how much they pollute, they always pay the same fee.
“This is why we are in favour of the full application of the polluter pays principle, i.e. that everyone pays based on how much they actually pollute and that the money in the future should be invested in cleaner production,” Kiš adds.
Part of the reform involves expanding the list of pollutants that are subject to the fee, expanding the list of contributors, as well as charging the same amount of compensation per tonne of emissions and increasing this amount by 10% over the next three years. In addition, the share of cities and municipalities in the revenue received from collecting environmental fees should increase from 40 to 50% of the state budget.
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