GREEN tax was first recommended by economists and environmentalists in a seminar at the Jatiya Press Club to draw attention to the very pressing need for environmental regulation. The proposers of the tax are of the view that a such a tax will rein in the polluters. Apart from the pollution tax or green tax which would be a penal tax, the seminar participants recommended other measures such as reduction of duty on imported environment friendly automotive vehicles and substantially increased duty on the unfriendly ones.
The proposed fiscal measures such as a penal tax for environment polluters or reduction or increase of duty to promote or discourage environment friendly and unfriendly imports respectively might sound somewhat novel as these are new in Bangladesh. But their appropriateness or usefulness can be hardly doubted.
Taxes of this type are frequently imposed in countries where environmental concerns are high. For example, an imported machine that has a significant polluting feature may have four or five times the normal duty imposed on it. This will escalates its price abnormally which in turn will reduce the incentive to import it. Similarly, the manufacturer of an offending product may find penal taxes imposed on his factory. The producer may continue his polluting activities. He finds himself not under a formal complete ban but he is required to pay a heavy tax for his polluting activities. The burden of paying this heavy tax may, thus, create the disincentive for such a producer and he may give up his polluting production methods.
Traditional enforcement measures and persuasion, so far, have yielded little or no results against certain environmental problems. But the fiscal measures that have been proposed stand a good chance of succeeding by creating adequate disincentives in the financial sense for the polluters to consider winding up their polluting activities in view of the penal taxes or the inability to bear the heavy import costs of polluting agents.