In 2008, the Revenue Commissioners imposed a tax bill of
€36.4 million on retail giant Dunnes Stores for four
years of plastic bag levies for small bags to wrap meat, fish and
vegetables. Dunnes had not charged customers this tax over
the past four years. Dunnes challenged the imposition of
this tax and the High Court upheld the Revenue's
assessment. The battle is poised to continue in the Supreme
The plastic bag levy, currently 22 cent per bag, was introduced
in 2002. The levy applies to bags that (a) are wholly or
partly made of plastic; (b) are suitable for use by a customer at
the point of sale; and (c) do not fall within the exempt classes of
bags. For example, certain small plastic bags that are used
to contain meat, fish, poultry, fruit, vegetables, sweets and that
also meet size requirements are exempt. The Revenue argued
that Dunnes's 'pinch and pull' bags were bigger than
the exempt bags.
Dunnes claimed that the levy only applies to bags supplied at
the point of sale, i.e. the checkout. The Revenue argued that
this 'checkout' interpretation would mean that retailers
could leave plastic bags at other locations around shops and thus
escape the levy.
The High Court noted that the purpose of the plastic bag levy
was to reduce discarded plastic bags littering towns and the
countryside. If the legislation only applied to bags supplied
at the checkout, then the exemptions for flimsy bags for certain
food would not be necessary, and the levy "would miss
large numbers of plastic bags and diminish greatly the impact of
the Act." Accordingly, the High Court held that the
legislation was clear and that the tax bill stood.
Dunnes has appealed the decision to the Supreme Court. The
matter is unlikely to be resolved quickly as the waiting list for
Supreme Court appeals is more than three years, although an earlier
hearing date may be achieved if there is an application for
In the meantime, the High Court's decision highlights that
retailers should exercise vigilance to verify whether or not the
plastic bags they supply are within the permitted exemptions from
the levy. Retailers in the UK may wish to consider whether
inventive arguments of the type used in these proceedings might be
a good work-around for any future levies coming into force.
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