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MOF considering raising export taxes
The Ministry of Finance is thinking of adjusting the export tax rates on some export items, such as raising the tax rates on natural mineral resources and rice.
A tax increase at this moment would install a barrier for rice exports, thus causing more difficulties for farmers, who already can not sell rice.
The new export tax rates would be different for three different groups. The first group, rice, now imposed 0-3%, would bear export tax rates of 0-40%. The second, crude oil, now imposed 0-20% and 5-20%, would bear tax rates of 5-50%. Meanwhile, MOF wants to raise the tax rates on coal from 1-20% to 5-45%.
Some items which are not taxed now could be assessed an export tax, including mineral resources (clay, apatite ore: suggested tax rates 0-30%) and fertiliser (suggested tax rates 0-30%).
Hoang Van Dung, Deputy Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), agreed that it is now necessary to adjust the tax rates on several items. However, he has called for MOF to consider thoroughly the tariffs in order to ensure businesses’ interests.
Dung said that the tax rate on tea exports should remain unchanged as tea is a competitive export item of Vietnam. Moreover, tea is not a sector that brings in a lot of profit.
Meanwhile, the Vietnam Coal and Mineral Resources Group (Vinacomin) has proposed that the MOF maintain the currently applied tax rate of 20%. The export tax rate on coal has been raised two times in 2008, from 10% to 15% and then 15% to 20%. Due to the higher tax, the group estimates it will remit VND5,700bil to the state budget this year, an increase of 62% over 2007. However, due to the higher tax, Vinacomin may not earn as much profit as in 2007 despite the higher export prices and its efforts to cut expenses.
Rice exporters are opposed to the plan to raise rice export taxes. The Southern Food Corporation said that a tax increase at this moment would install a barrier for rice exports, thus causing more difficulties for farmers, who already cannot sell rice.
Dung from VCCI said that in the long term, the tax increases prove to be necessary. However, he said that the suggested sharp increases (from 0-3% to 0-40%) need reconsideration.
According to the Ministry of Finance, China is now imposing 25% on ingot steel exports, 135% on fertiliser in order to restrain exports. Russia is imposing 40% on crude oil.
In Vietnam, low export tax rates created favourable conditions for enterprises to export 5.7mil tonnes in the first five months of the year, gaining the turnover of $4.5bil, or 134.2% of the same period of last year.
VNN
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