The Swedish inquiry about taxation of chemicals in clothing and shoes has now submitted its report to the government (SOU 2020:20). The report includes a proposal of a new tax to reduce the risk of exposure to harmful chemical substances.
The Swedish inquiry about taxation of chemicals in clothing and shoes has now submitted its report to the government (SOU 2020:20). The report includes a proposal of a new tax to reduce the risk of exposure to harmful chemical substances.
Fashion has become a lifestyle and the consumption of clothing and shoes has increased significantly in the EU in recent years. The fashion industry is also one of the largest industrial polluters and the use of hazardous chemicals in the production stages and in products is large. The Swedish inquiry was initiated by the government in May 2019 to develop a proposal of a tax that reduces the exposure from hazardous chemicals in clothes and shoes in a cost-effective manner.
FRAM researcher Daniel Slunge was one of the experts appointed by the government to participate in the inquiry.
– Taxes has traditionally not been used in chemicals management. But when focus is shifting from a few very hazardous substances to concerns about cumulative effects of low dose exposure to multiple chemicals in consumer products, taxes can be a good policy instrument choice. From an economic efficiency point-of-view, it is desirable to target taxes towards specific environment or health damages as closely as possible.
A key challenge that was faced in the investigation was the lack of information about what chemicals different clothes and shoes contain.
– To address this, we proposed to tax all clothes and shoes and then allow for tax deductions if companies can prove that their products do not contain listed hazardous chemicals.”
The Inquiry has proposed a tax of SEK 40 per kilogram for all clothing and footwear, with the possibility of tax deductions of up to 95 per cent of the tax for products that do not contain specific particularly hazardous substances and biocides that may be found in all clothing and footwear.
These substances are listed in five annexes to the act and include substances that:
An additional tax of SEK 19 per kilogram is proposed for clothes and shoes that may contain phthalates and highly fluorinated substances (PFAS).
The new tax is proposed to take effect on the 1st of April 2021.
Daniel Slunge is a FRAM researcher and policy analyst. He has a PhD in Environmental Management and Economics from the University of Gothenburg. Read more about his work here.
Read the report: Tax in fashion – to get rid of harmful substances [In Swedish with English summary]
Read more: New Swedish investigation about taxation of chemicals in clothing and shoes