Nepal's waste management sector is standing at a critical crossroads, and the introduction of the controversial "scrap tax" has sparked fiery debates among policymakers, business owners, waste workers and recyclers. While this tax is lauded as a potential game-changer to formalise the recycling economy, it also exposes the deep-rooted inefficiencies and challenges that plague the system. Amid all this, the sight of vehicles apprehended for transporting scrap materials underscores a pressing question: is tracking down the trucks enough, or do we need a structured framework for sustainable waste management?

The scrap tax aims to regulate transactions involving materials like plastic, metal, paper and glass. This tax-implemented over the years through various Financial Acts-intends to create an organised recycling economy while boosting government revenue. In practice, however, the informal economy's vast scope means countless transactions escape both regulatory and taxation frameworks.

Kathmandu Metropolitan City (KMC) has led efforts in streamlining waste tax regulations, taxing plastic bottles at Rs 1 per kilogramme since 2076 BS. But discrepancies remain-for instance, Lalitpur Metropolitan City employs private contractors to manage tax collection, whereas Dhangadhi Sub-Metropolitan City imposes much higher rates of Rs 3 per kilogramme on certain materials. Such inconsistencies across municipalities create confusion and inequity in the sector.

The issues are particularly pronounced during material transportation. An entrepreneur and an advocate for fair waste management policies highlighted, "Each local government imposes its own tax, adding significant operational challenges. Businesses face destruction of their centres without clear communication of the rules, discouraging registration and compliance."

Voices from a scrap centre owner in Kageshwori Manohara Municipality and one who runs a centre in Mahalaxmi Municipality provide a glimpse into the grassroots struggle. The scrap centre owner from Kageshwori Manohara Municipality, who plans to leave the industry after six years, expressed the lack of government support despite paying taxes.

Meanwhile, the owner of the scrap centre in Mahalaxmi Municipality emphasised the need for designated zones for scrap centres to reduce conflicts and inefficiencies. He additionally highlighted how heavy reliance on India for recycling incentivises illegal transport, risking hefty fines for noncompliance.

Both entrepreneurs voiced concerns about intense competition, fluctuating material rates and delayed payments leading to landfill dum

ping.

Before implementing or enforcing measures like the demolition of scrap centres, it is essential to consider the repercussions on informal waste workers. These individuals are often solely dependent on these centres for their livelihoods. Scrap tax policies and operational changes in waste management systems must integrate social inclusion frameworks, ensuring the financial stability and well-being of informal workers who already operate in precarious conditions. Measures like skill development programmes, financial assistance, or alternative income opportunities should accompany the restructuring of scrap businesses to safeguard the economic security of waste workers. Failing to acknowledge this human aspect can also undermine the principles of sustainable waste management.

From dismantled kawadi (scrap) centres to irregular transportation of materials, there's a clear lack of standardised criteria. The absence of proper zones for operations, tax compliance challenges and over-reliance on informal networks collectively hinder sector-wide growth.

The chairperson of one of the waste management companies in Kathmandu added that accountability should extend beyond grassroots scrap dealers to those facilitating irregularities from higher positions. He urged policymakers to focus on creating robust systems for buying and selling materials within Nepal, limiting the outflow to Indian recycling centres.

While vehicles have been caught for illegal transportation of scrap materials, punitive actions alone will not resolve the inefficiencies in the sector. Differentiated tax rates and municipal-specific strategies may allow for targeted interventions, but they also amplify complexities for businesses operating across jurisdictions.

The solution lies in harmonised policies that balance local contexts with broader environmental goals. Uniform tax rates could alleviate operational burdens, prevent waste transportation across regions, and ensure that all stakeholders contribute equally to waste management efforts.

Passionate advocates are driving change in Nepal's waste management sector, highlighting its potential for transformation. Stakeholder-led protests have emphasised the need for transparent processes in centre registration and clear communication from municipalities.

To promote equity and efficiency, the government must establish standardised criteria for all municipalities to eliminate inconsistencies, designate zones for scrap centres to reduce conflicts and enhance operations, incentivise the formal registration of recycling industries, and develop local recycling infrastructure to decrease reliance on foreign facilities.

Designating specific zones for scrap centres would help minimise conflicts with residential and commercial areas while improving operational efficiency. Offering incentives like tax breaks, grants or technical support can motivate recycling industries to register formally. Building strong local recycling systems, such as regional processing plants and transport networks, is important for improving the domestic recycling system. Addressing these issues holistically can lead to harmonised policies that make waste management more efficient, fair and environmentally sustainable.