Adam Smith’s canons in the Wealth of Nations, identified that equity, certainty, convenience and efficiency are vital characteristics that design an effective tax system. It is necessary to apply Adam Smith’s canons to validate this levy’s purpose, and in order to identify its aim and whether it is operating correctly.
Firstly, starting with equity, this criteria classifies taxpayers according to their ability to pay tax on fair grounds. In the case of the levy, the Committee for the Environment (2013) reviewed that charging 5p is cheaper and customers will see this as greater value, compared to other retailers who charge 20p or more, these bags for life are re-usable and retailers should replace it free of charge. However, local shoppers disagree with the levy because they think it is just another way to get money off the public, others feel big families will be hit the most, as the charge is for single-use carrier bags and can turn out quite expensive by the end of the month (Carrick Times, 2013). Furthermore, a Mintel report (2012) shows 30% of the public believe that it is too costly to be green, and the hard economy affects their daily lives. There are mixed views of this levy being fair in terms of different individuals, especially shoppers who feel that the levy is just another tax imposed by the government; on the other hand they have the choice of bringing their own re-usable bags, and this helps both the consumer not to spend money on plastic bags and to look after the environment. This indicates that the levy was imposed to create awareness of the environmental impact and encourage people to bring their own bags rather than tax the public unnecessarily.
Secondly, certainty comes in the aspect of taxpayers being aware of the tax they must pay and when and where to pay it (Lymer and Oats, 2013). According to the Committee for the Environment (2013) retailers concerns are that staff must deal with customer’s anger to pay for carrier bags, but the committee strongly believes that their solution of putting posters and banners around the store will ease this problem. Further to this, an argument from the British Retail Consortium (BRC) points out that the Northern Ireland Assembly cannot both accumulate revenue on the taxation of bags and reduce the use of bags as it will mean that if one goal succeeds the other will fail (Gordon, 2011). In contrast to BRC, the Northern Ireland government services explain that the levy is not about raising money; it is about changing habits and improving the environment, for a healthy future (nidirect, 2013). The government is in constant pressure, particularly when they have the power to stop people and be aware of their litter, it was the case when a Spanish sperm whale died when it swallowed 17kg of plastic bags that was dumped by UK supermarkets (Tremlett, 2013). Powerful news as such, urges the public and the government to act before other animals die and other problems occur. It can be suggested that a 5p charge can strongly help their aim of reducing plastic bags consumptions.
Thirdly, convenience in respect to how people will pay for the tax, James and Nobes (2005). The carrier bag levy requires consumers to pay at the time of their purchase. This is convenient because consumers get to pay instantly and efficiently in a timely manner. But the Carrier Bag Consortium (CBC) argues that even with a convenient charge, people wrap their goods in their clothing, and this increases chances of theft and it cost each store approximately 5,400 pounds per annum (Edward and Fry, 2011). According to the Committee for the Environment (2013), retailers know that if a customer wanted to shoplift, they will shoplift irrespective of carrier bags; therefore the levy could not encourage theft. In the contrary, Harvey (2013)