Green tax hike on petrol to go ahead

Customers purchase petrol at a station on Tran Quang Khai Street, Ha Noi. - VNS Photo Thai Ha The Ministry of Finance (MoF) is going ahead with its plan to increase environmental protection tax on petroleum from the current VND1,000-4,000 to VND3,000-8,000 per litre, despite objections from other ministries and the public. In its second draft of the Law on Environmental Protection Taxes announced last week, the ministry proposed a tax hike on fuel consumption of VND3,000-6,000 per litre for aviation fuel, VND1,500-4,000 per litre for diesel, VND300-2,000 per litre for kerosene, and VND900-4,000 per kg for mazut. If the new tax rate is applied, the price of gasoline at the pumps will rise to around VND22,000 (roughly US$1) per litre from the average price at the pump of around VND16,000 to VND17,000 for petrol and VND10,000 to VND11,000 for diesel and mazut, respectively, analysts said. The Ministry of Transport (MoT) told the Ministry of Finance (MoF) that Viet Nam would apply two petroleum quality standards based on the Euro 2 and Euro 4 emission standards, suggesting that the MoF set a lower environmental protection tax for Euro 4, which cleans emissions from diesel cars, to encourage the production of more eco-friendly petroleum. The Viet Nam National Petroleum Group (Petrolimex) said the calculation of environmental protection tax on fuel should encourage E5 bio-fuel consumption. The Viet Nam Petroleum Association (VINPA) has supported the MoF’s tax proposal, though it has pointed out…... [read more]

The Ministry of Finance (MoF) is going ahead with its plan to increase environmental protection tax on petroleum from the current VNĐ1,000-4,000 to VNĐ3,000-8,000 per litre, despite objections from other ministries and the public. Customers purchase petrol at a station on Trần Quang Khải Street, Hà Nội. - VNS Photo Thái Hà In its second draft of the Law on Environmental Protection Taxes announced last week, the ministry  proposed a tax hike on fuel consumption of VNĐ3,000-6,000 per litre for aviation fuel, VNĐ1,500-4,000 per litre for diesel, VNĐ300-2,000 per litre for kerosene, and VNĐ900-4,000 per kg for mazut. If the new tax rate is applied, the price of gasoline at the pumps will rise to around VNĐ22,000 (roughly US$1) per litre from the average price at the pump of around VNĐ16,000 to VNĐ17,000  for petrol and VNĐ10,000 to VNĐ11,000 for diesel and mazut, respectively, analysts said. The Ministry of Transport (MoT) told the Ministry of Finance (MoF) that Việt Nam would apply two petroleum quality standards based on the Euro 2 and Euro 4 emission standards, suggesting that the MoF set a lower environmental protection tax for Euro 4, which cleans emissions from diesel cars, to encourage the production of more eco-friendly petroleum. The Việt Nam National Petroleum Group (Petrolimex) said the calculation of environmental protection tax on fuel should encourage E5 bio-fuel consumption. The Việt Nam Petroleum Association (VINPA) has supported the MoF’s tax proposal, though…... [read more]

For years, no due attention has been given to environmentally-related development projects, including foreign-invested projects. Food processing plants, sugar mills, manufacturing, engineering and chemicals factories have all released waste causing huge amounts of environmental pollution. Under the Environment Law, which was put into effect in 1993, all investment projects must submit reports assessing their environmental impact to ensure that they are not causing environmental pollution, but many have failed to meet these requirements. There is growing concern over the environmental legal framework as it still has many loopholes and lacks a necessary deterrent. According to the Ministry of Justice, Vietnam has issued around 300 documents on environmental protection, many of which are still short of fundamental and specific regulations. For example, there are no environmental protection taxes, detailed regulations on compensation for environmental damages or specific measures to encourage environmental protection. In addition, the wording in the Environment Law can be interpreted in different ways and many laws, which have been in effect for less than one year, are already outdated. For example, the Bai Bang Paper Corporation in Phu Tho province was recently fined VND30 million for causing a high risk of pollution. However, this is too low and not deterent enough to a company earning up to VND10 billion per year. The Hanoi Beer Factory, which has caused environmental pollution for many years, still has to pay a fine of VND32 million. With such a low fine, other beer producers find it much cheaper than the cost they…... [read more]

Viet Nam News HÀ NỘI - The Ministry of Finance has proposed, in a draft law, to almost triple the environmental protection tax on oil and gas consumption from the current VNĐ3,000 (US$0.13) to VNĐ8,000 per litre. The draft will be submitted for approval to the Government in June and the National Assembly in October. The new draft law also added E5 bio-fuel and E10 ethanol blend fuel to include in the environmental protection taxes of VNĐ2,700-7,200 and VNĐ2,500-6.800 per litre, respectively, though the products are considered cleaner and environmentally friendly than others. In addition, the tax on aviation fuel was suggested to be increased from the current VNĐ1,000-3,000 to VNĐ3,000-6,000 per litre. The tax on diesel fuel is expected to increase from the current VNĐ500-2,000 to VNĐ1,500-4,000 per litre, while that of mazut would also go up to VNĐ900-4,000 from VNĐ300-2,000 per kilo. Plastic bags are also expected to see higher environmental taxes, rising from VNĐ30,000-50,000 to VNĐ40,000-80,000 per kilo, if the draft is approved. Earlier, Minister of Finance Đỗ Hoàng Anh Tuấn acknowledged that the sector would continue promoting the collection of environmental protection taxes. This year, the ministry would expand categories to be taxed. Tuấn said if the current environmental protection tax on petroleum was increased over the ceiling level, the value of collections would be 10 to 20 times higher than the direct collection from non-agricultural land use. The ministry said the increased tax on some natural resources, and environmental protection on petroleum, had contributed to…... [read more]

Environmental protection tax on pollutant production The Government’s report emphasises the need to issue the Law on Environmental Protection Tax to cope with the negative environmental impact caused by the current rapid socio-economic development, urbanisation and modernisation processes. Vietnam’s sustainable development is facing numerous challenges due to increasing pollution in the soil, water and air. At present, Vietnam has not yet had a separate law on environmental protection to impose tax on commodities that cause environmental pollution. Usage and production in order to limit the production and consumption of these types of products has also been unaddressed previously. The assessment report of the NA's Committee for Finance and Budget also agrees that a law on environmental protection tax is needed to create a synchronous legal framework. Committee agreed it would help to adjust behaviours that cause a negative impact on the environment and raise funds for environmental protection. This would assist in balancing economic development and sustainable development, as well as implementing international commitments. The draft Law on Environmental Protection Tax consists of four chapters and 14 articles stipulating tax declaration, tax payment and tax refund on environmental protection. Tax payers include producers of coal, oil and gas, plastic bags, Hydrochlorofluorocarbons (HCFC solution), and pesticides that are limited to use in agricultural production. The Government proposes that the law on environmental protection tax regulate a tariff table on the minimum and maximum of tax on environmental protection. With such a tariff table, it is expected to collect a tax revenue…... [read more]

In his opening speech, NA Chairman Nguyen Phu Trong said the eighth NA session is taking place after the celebrations of Hanoi’s millennium- a significant event which has raised national pride and encouraged the Party and people to gain new achievements in national construction and defence. This year, Vietnam has faced a lot of difficulties and challenges caused by the global economic downturn, natural disasters and epidemics. However, under the correct leadership of the Party and the Government, socio-economic targets have been reached, with an estimated economic growth rate of 6.7 percent for this year. Industrial production and export turnover have posted high growth rates while State revenues are expected to be higher than estimated and inflation is control. Improved social welfare, social security have helped to improve people’s living standards significantly. Remarkable progress has been seen in administrative reform, and preventing corruption. The successful holding of the ASEAN Summit, the 31st General Assembly of the ASEAN Inter-Parliamentary Assembly (AIPA) has elevated Vietnam’s status in the international arena. The achievements recorded in 2010 are fresh impetus for carrying out resolutions adopted at the 10th National Party Congress and the five-year plan for socio-ecocnomic development (2006-2010) under the NA’s resolution, which will give fresh impetus to socio-economic tasks in the following years. Mr Trong pointed out the limitations and weaknesses in socio-economic development that have not yet been resolved, namely a slow economic restructuring, poor infrastructure, ineffective investment, a high trade deficit and a State budget overspend and soaring prices, which…... [read more]

According to the Environmental Protection Tax Law, with 4 chapters and 13 articles, environmental protection tax will be imposed on products classified as hazardous to the environment including petrol, coal, plastic bags, and plant protection substances. The law will take effect from January 1, 2012. The revised laws on the amendment of some articles of the Insurance Business Law, part of Vietnam’s commitment to the World Trade Organisation clarifies regulations regarding compulsory reinsurance, cooperation and competitiveness in the insurance business. The revised Law on Securities controls private offerings to companies to ensure a legal framework for securities operation. The laws on insurance business and securities will be valid from July 1, 2011. According to the five-article resolution on tax reduction or exemption of agricultural land use, which will be effect from January 1, 2011 – December 31, 2020, tax will be exempted in agricultural land used for the purposes of research, experimentation, production testing, and farmland. The resolution also defines the subjects for exemption and specifies limits for receipt of agricultural land use rights transferred to households or individuals for agriculture purpose.... [read more]

The Vietnam National Petroleum Group (Petrolimex) immediately raised their retail price following the decision. The new prices are VND21,030 (US$1) per litre for RON 95 gasoline, VND20,430 (97 cents) per litre for RON 92 gasoline and VND20,100 (95 cents) per litre for biofuel E5. The ministries said RON 92 prices hit US$83.97 per barrel in the world market on May 18, and with this, the base price for domestic dealers has been VND2,254 (11 cents) higher than retail levels. The base price is typically calculated based on the import prices plus taxes, costs and profit quotas for fuel dealers. The ministries added that they tried to curb price hikes by cutting import tariffs for oil products by 2 to 7%, and let enterprises maintain the price stabilisation fund extraction at VND300 (one cent) per litre. This is the fifth time petrol prices have been adjusted this year, after two cuts and two increases. Petroleum prices were last raised on May 5 by nearly VND2,000 (10 cents) per litre. Transport operators expressed their intentions to lift their rates following the recent fuel price increases. On May 20, the ministries also allowed dealers to lift the prices of diesel and kerosene by VND500 (two cents) per litre, and slash the prices of mazut by VND64 per kg. The prices of these products remained intact, though. As required by authorities, environmental protection taxes have been tripled to VND3,000 (14 cents) per litre for gasoline and VND1,500 (seven cents) per litre for diesel, as…... [read more]

Vietnam’s Ministry of Finance has proposed a draft law that suggests nearly tripling environmental protection tax on oil and gas consumption. Vietnam’s Ministry of Finance has proposed a draft law that suggests nearly tripling environmental protection tax on oil and gas consumption. People in Vietnam currently have to pay VND3,000 (US$0.13) in environmental tax for each liter of gasoline, while the finance ministry recommended that should be raised to VND8,000 ($0.36) in its draft regulation, which will be submitted to the central government in June and the National Assembly in October for approval. In 2014, a similar hike was imposed on the type of tax, raising it from VND1,000 ($0.04) to VND3,000, which the Ministry of Finance referred to as a good way to stabilize the national budget. During an interview with Tuoi Tre (Youth) newspaper, Nguyen Van Tiu, chairman of the management board of a Hanoi-based oil and gas company, affirmed that the proposed increase in environmental protection tax would certainly raise gasoline cost in the country. Fuel price itself has been forecast to skyrocket in 2017 when the Organization of the Petroleum Exporting Countries reduces its output, Tiu stated, adding that elevating the tax without careful consideration would leave an enormous impact on the economy. According to Nguyen Minh Tan, an official from the National Assembly Finance and Budget Committee, adjusting the environmental protection tax requires approval from the nation’s legislative body. The new amount of tax must be based on the practical status of the country’s socio-economic…... [read more]

Businesses highlighted the obstacles arising from e-customs procedures, environmental protection tax, and land rent as particular concerns. In relation to select provinces, 81 percent of businesses reported suffering negative added value tax over the first nine months of 2012, mainly because of lax sales. The ministry has recently accelerated tax and customs procedure reform in an attempt to facilitate business operations. Customs procedures now number 178, down from a height of 239 procedures in 2008. More than 60 percent of customs bureaux currently use e-customs clearance. Hoang Viet Cuong, Deputy Head of the General Department of Customs, noted e-customs has only just been implemented in a number of bureaux so some obstacles must be expected. Japan will assist the sector with applying the time-saving technology more effectively. Businesses complained about the unreasonable disparities between land rent increases for domestic companies compared to foreign ones. Land rent is adjusted every five years. Foreign businesses must pay an increase of around 15-20 percent but there is no such increase ceiling for domestic businesses. Nguyen Thanh Nhan, an investor at Tan Phu Trung Industrial Zone in HCMCity, said his land rent rose from VND250 per sq.m in 2010 to VND5,940 per sq.m now. The MoF listened to participants’ concerns and promised to seek solutions to their problems in the future.... [read more]




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