Bishop of St Albans, Rt Rev Alan Smith, made the plea in the House of Lords after figures showed fly-tipping in the UK increased by four per cent last year.
In 2016 the government also spent four percent less on preventing and prosecuting fly-tipping incidents.
There were 936,360 recorded fly-tipping cases in 2015-16, costing councils across the UK £49.8 million to clear up.
Rt Rev Alan argued that people were avoiding taking their rubbish to the landfill because taxes are too high, and that more money made from the tax should go towards stopping illegal trash dumping.
He said: "Clearly the existing powers are simply not working."
"Will the Government consider the possibility of increasing the level of enforcement action against waste crime funded from this tax?"
Responding for the government in the House of Lords the Earl of Courtown said the power for councils to issue fixed penalty notices for fly-tipping only came in May last year, so more time was needed before a reduction could be expected.
