More people want to buy used, and recycling has become more and more popular in recent years. But for those who sell used clothes, there are many obstacles. 25 percent VAT must be paid on used clothing, even if VAT was paid on the products before they were delivered for reuse. Anja Bakken Riise, head of Framtiden i våre hande believes this must change if Norway is to invest in a circular economy. – Today we have a use-and-throw economy in Norway. One of the most important things we do is to make it cheaper to buy used than to buy new. Bakken Riise believes the authorities should remove the VAT on second-hand sales, repairs and sharing of clothing and equipment. Sophia Johansson is co-founder of the recycling concept Prisløs in Oslo. She says it is very challenging to operate profitably in the recycling industry in Norway today. – The whole industry is held down by a number of laws which we believe can be changed quite easily. Sophia Johansson runs the thrift shop Prisløs in Oslo. Photo: Emma Sukalic Johansson says that removing VAT is one of the easiest things politicians can do. – VAT on repair and sale and lending of used things must be removed at once so that we can compete in the market. Fast fashion vs. second hand The leader of Framtiden in our hands believes that used clothes should be equated with, for example, used cars. They are exempt from the 25 percent VAT. – It is a completely crazy paradox, says Bakken Riise. But thrift stores that sell clothes are categorized as retail. On a par with large chains such as Hennes & Mauritz, IKEA and Zara. The second-hand shop Prisløs pays VAT on the sale of used clothes, even if VAT was paid on the clothes before they were delivered for reuse. Photo: Privat Stores that set themselves the goal of zero waste, as Prisløs does, end up taxing more than stores that choose to throw away textiles and products they don’t end up selling. – Today you have to tax the inventory. When we have a goal of “zero waste”, we cannot throw away goods that are not sold, says Johansson. Today you have to pay tax and VAT. to give goods away, for example to a thrift store. If the store registers an item as damaged – or throws it away before an item count – they will receive a tax deduction for the lost product. – It is known that chains within “fast fashion” cut into pieces, burn and throw away clothes in order to register them as waste. Then they don’t have to pay tax. It’s just completely strange and backwards, says Johansson. She believes something like this should rather be punished with some sort of environmental tax. Do you think it is wrong that the shops have to pay VAT on second-hand clothes? Yes, make it cheaper to sell used! No, everyone who runs a clothing store must be treated equally. I don’t know Show result From use-and-throw to circular economy When the government presented the Hurdal platform in October 2021, it included a separate point about the circular economy: – When the Hurdal platform came, we shouted hooray! I couldn’t agree more with the things the government wrote there, says Bakken Riise, and adds: – Now a year has passed, and very little has happened in practice. For many small and non-profit actors, both the VAT and the very outdated second-hand trade act stand in the way of the circular economy that the government has said it will facilitate. Leader of the Future in our hands, Anja Bakken Riise, believes that removing VAT is easy for the government to do something about. Photo: André Børke Bakke Riise is calling for measures from the government as soon as possible. – We are very excited about what will come in the state budget in a short time, and not least where this action plan for a circular economy with concrete measures will turn out. – No guarantee for lower prices news has submitted the criticism from Framtiden i våre hände and MDG to the Ministry of Finance. State Secretary Erlend Grimstad (Sp) replies in an e-mail that cuts in value added tax are not a suitable measure to get more people to choose reusable clothing – Similar attempts from other countries show that cuts in value added tax were not a suitable means of influencing demand. Instead of giving lower prices to customers, the cuts led to increased profits for the companies. Grimstad says there are more effective means of safeguarding environmental concerns than VAT exemptions. – It could be, for example, environmental taxes or support from the state budget. Need more political willingness to act Børge Bøyum is director of FREM Bodø, which also runs the concept store Egna. He believes that the industry must be built up if we are to have a circular economy and achieve sustainability goals. For Egna, the current system has put the hook on the door. The dream was to develop and facilitate the creation of new circular business models. Børge Bøyum runs the recycling shop Egna, and believes there is a great need for a larger recycling industry. Photo: Petter Strøm Now, however, it is the end of the store, just over ten months after opening. – To get such an industry up and running, a little more political willingness to act is needed. Today we are talking about an industry where there is no profit or surplus, says Bøyum. At the second-hand shop Egna, you could only buy used. The store had to close just over ten months after opening. Ingrid Liland is deputy leader of the Green Party. She thinks it is sad that Egna will no longer be run, and is clear that removing VAT is one of the most concrete steps the government can take. – Egna is an example of a business that society needs more of. Then it must be cheaper for you and me to shop at such places. – Removing VAT on repair, reuse and re-use should already happen now, says Liland.
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The future in our hands and the MDGs require VAT exemption on used clothing – news Nordland
