By being able to identify the evidence of 30% recycled plastic and the number of loop counts this plastic has gone through, IT company Security Matters (ASX: SMX) will make is easier and potentially cheaper to comply with the 30% recycled Plastic Packaging Tax (PPT) UK Legislation.
Effective 1 April 2022, the UK is one of the latest countries to implement a plastic packaging tax.
The adoption of the PPT tax follows five years of research by the UK Government into how tax system could be instrumental in A) tackling single- use plastic waste, and B) incentivising the use of recycled material in the production of plastic packaging.
Simply put, Security Matters focuses on digitising physical objects on the blockchain and as such is regarded as one true solution in order to create a circular economy.
This technology is expected to help companies impacted by the PPT UK Legislation reduce the time and costs associated with compliance.
In practise, PPT only applies to manufacturers and importers - producing or importing ten metric tonnes of plastic packaging or more annually - that use less than 30% recycled plastics in their packaging.
However, registration for PPT will be required even if a business does not meet the threshold and therefore does not need to pay tax.
While certain plastic packaging was previously excluded, PPT will be applied to any packaging which has been classified where plastic is the heaviest component and includes ‘greener’ plastics which are biodegradable and compostable.
Security Matters suspects the GBP200 per tonne tax rate, incurred by manufacturers and importers subject to this tax, will eventually be passed down the value chain to customers.
By automating the auditing and certification of materials, Security Matters CEO Haggai Alon expects the company’s blockchain enabled technology to make increased record keeping and sampling requirements - embedded within PPT legislation - as seamless as possible.
Security Matter’s circular sustainable solution, explains Alon, lets companies comply immediately with the new legislation – via a transparent and automated reporting system for both regulation, compliance, and clients – while positioning themselves as environmentally friendly.
As well as automating record keeping and sampling requirements, Alon advises investors that Security Matter’s technology seamlessly tracks and traces all products across the entire supply chain.
“Security Matters can digitally certify the materials and uses technology/automated auditing to minimise human errors,” said Alon.
“By providing automated reports to comply with the HM Revenue and Customs via an automatic bridge/fill, these reports mitigate the on-going expected costs on completing these tax returns, while also ensuring accurate and appropriate records are kept.”
In summary, Alon notes that by implementing Security Matter’s technology companies can achieve a more cost-effective solution than paying the PPT, while offsetting the ongoing expected expenses involved in completing these tax returns.
The net effect, adds Alon, is that companies effectively lower their tax burden and their operational costs.
The plastics sector aside, Security Matter’s circular sustainable solution allows any company to track, trace, certify and authenticate all gas, liquid, and solid products across a supply chain from raw material, through production, to product and waste and recycle and reuse.
“Security Matters’ ability to assist companies identify and report on its recycled content used in plastic packaging in the UK is revolutionary and economical,” said Alon.
“We believe that by implementing our technology, the cost of this tax will become minimal with automated systems implemented to ensure there is minimal impact on staff costs.”
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