Will the new tax affect the prices of cell phones and other electronic devices?

By the end of July next year at the latest, we will have the right to have electronic devices and other appliances repaired.

Illustrative photo. Photo: Getty Images

Europeans will apparently have to prepare themselves for an increase in the price of electronic devices. The reason for this is planned new taxes and regulations from the European Union. These mainly involve a new tax on electronic waste and, in some cases, measures that guarantee the right to repair.

In its current draft for the long-term EU budget for the years 2028 to 2034, i.e., the so-called multiannual financial framework, the European Commission is planning a tax on electronic waste. The tax is to amount to two euros per kilogram of uncollected electronic waste, which is expected to increase the Brussels treasury by a total of fifteen billion euros per year.

The tax on electronic waste is intended to force member states, manufacturers, and sellers of electrical appliances to improve the collection and recycling of such waste. It applies to electrical appliances, computers, mobile phones, household appliances, and other similar devices.

Manufacturers and sellers of electronic devices will be responsible for uncollected electronic waste and will then try to pass on the associated increased costs to end consumers. If they succeed, this will naturally lead to an increase in the price of electronic devices.

In 2021, Sweden produced 28.4 kilograms of electronic waste per capita, but according to Eurostat data, only collected 12.9 kilograms per capita. This means that statistically, 15.5 kilograms of electronic waste were reported as not collected. In this case, Sweden would pay an annual tax of around €31 per inhabitant. With a population of around 10.5 million, this would mean around €325 million for the European coffers.
The associated administrative costs will be borne by the EU member states themselves and by the manufacturers and sellers of electronic devices operating within them.

In this context, the supply and customer chains in the electronics sector must be adapted in such a way that the proportion of uncollected electronic waste is reduced to a minimum, which means additional costs that will ultimately be borne by the end consumer. However, this will not happen before 2027 or 2028, when the measure will come into force at the earliest.

A little earlier, however, by the end of July next year at the latest, another EU regulation will come into force in the countries of the Union. This guarantees the right to repair electronic devices and other equipment. Manufacturers of electronic devices, such as mobile phones or household appliances, must be able to ensure that such devices can be repaired at a reasonable price and within a reasonable time.

At first glance, this sounds like a clear win for consumers. However, manufacturers and retailers will be faced with increased costs for the procurement of spare parts and more cost-effective repairs. At the same time, they will extend the service life of the aforementioned products at their own expense. As a result, their sales figures will deteriorate further due to the longer service life, which means additional costs.

It can therefore be assumed that the reduction in the cost and ease of repairs and the extension of the service life of products will ultimately be paid for by the end consumer. This will take the form of higher prices for new electronic devices and household appliances than they would actually be without the regulation in the form of the right to repair.

While the right to repair gives the customer something tangible in return for a higher price, namely easier and cheaper potential repairs, the tax on electronic waste will hardly be felt other than through a price increase. In return, the customer receives a completely intangible reduction in negative externalities in the form of electronic waste and its harmful effects on the environment.