July 18, 2018 13:44

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The majority of respondents agreed to increase the environmental tax on petroleum

13:56 | 03/04/2018

VCN- The Ministry of Finance has issued a formal report explaining and accepting opinions of ministries, branches, localities as well as organizations and individuals on the draft Resolution on environmental protection tariffs. Accordingly, it emphasized that the majority agreed with the content of the draft, especially with regard to regulations on petroleum.

da so y kien dong tinh tang thue moi truong voi xang dau What does the Ministry of Finance say about the increase of the environmental tax on oil and gas?
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da so y kien dong tinh tang thue moi truong voi xang dau
Illustrative photo. Photo: Hoai Anh.

Dramatic increase to limit use

Previously, in the draft Resolution sent for comments, the Ministry of Finance proposed to adjust the environmental protection tax as follows: Gasoline increases from VND 3,000 per liter to VND 4,000 per liter, an increase of VND 1,000 VND per liter; mazut oil (fuel oil) increases from VND 900 per liter to the ceiling level of VND 2,000 per liter, an increase of VND 1,100 per liter; grease increases from VND 900 per kg to the ceiling level of VND 2,000 per kg, an increase of VND 1,100 per kg; Aircraft fuel keeps the current level of VND 3,000 per liter for flying fuel (ceiling level in the tax bracket) and VND 300 per liter for kerosene (floor level in the tax bracket). The majority of comments agreed with the content of the draft.

In addition, it was proposed to adjust the environmental protection tax rate for mazut oil from VND 900 per liter to VND 1,500 per liter or from VND 900 per liter to VND 1,200 per liter in order not to affect the cost of the products that use fuel mazut oil. Because in fact, this is the main input fuel of power plants, glass and ceramic production.

In this regard, the Ministry of Finance said that mazut oil/fuel oil (FO) is a type of fuel that polluted the environment because it containd high sulfur content (from 2.0 to 3.5 mg per kg), producing sulfur gas (SO2) while burning, which was a very toxic gas for the environment. Therefore, in order to limit the use of fossil fuel products which pollute the environment, the Ministry of Finance proposed to keep to the draft resolution (proposed to increase the environmental protection tax rate for mazut oil from VND 900 per liter to the ceiling level of VND 2,000 per liter).

It is proposed to increase the environmental protection tax rate from VND 300 per liter to VND 3,000 per liter (equivalent to the tax rate of aircraft fuel) due to the low demand for oil for lighting in rural areas. In fact, the demand for oil in Vietnam is between 4,500-5,000 m3 per month and is mainly used for manufacturing enterprises, especially foreign invested enterprises to reduce the price difference with gasoline to avoid commercial fraud.

The Ministry of Finance has accepted this idea and adjusted environmental protection tax rate of other oil and grease products. In particular, the Ministry of Finance proposed to adjust the environmental protection tax rate for kerosene from VND 300 per liter to the ceiling level of VND 2,000 per liter.

Calculate purchasing power

In particular, some comments to the Ministry of Finance proposed a roadmap to increase environmental protection tax rates by 2020 to suit the economy and purchasing power of the people.

The Ministry of Finance explained that the proposed tax rate for each taxable goods in the draft resolution, including petroleum (from VND 3,000 per liter to VND 4,000 per liter, as well as an increase of VND 1,000 per liter for gasoline) was ensured within the environmental protection tax bracket and complied with the principles of specific environmental protection tax rates specified in Clause 2, Article 8 of the Law on Environmental Protection Tax (tax rates applicable to taxable goods shall be determined according to the extent of causing adverse impacts on the environment of the goods).

With the adjustment of the environmental protection tax rate mentioned above and expected to take effect from 1 July 2018, the adjustment of environmental protection tax rates will affect the consumer price index (CPI) in July 2018 (compared with June 2018), about 0.27-0.29% and will affect the average CPI in 2018 about 0.11-0.15% (according to the resolution on the socio-economic development in 2018 with average consumer price growth rate of 4%).

However, the increase of environmental protection tax will encourage the efficient use of energy and resources to contribute to encouraging the production and consumption of environmentally friendly goods (such as bio-fuel, E5, E10, B5, B10 gasoline and environmentally friendly plastic bags).

da so y kien dong tinh tang thue moi truong voi xang dau Experts view: Proposal to increase the environmental protection tax is reasonable

VCN- The Ministry of Finance has officially collected comments on the draft resolution on environmental protection tax ...

As a result, it will reduce the emissions of environmental pollutants, ensure sustainable economic development, reduce environmental pollution and implement Vietnam's international commitments on environment protection.

By Hong Van/ Hoang Anh