|
Mining firms say tax won’t stop rampant exploitation
An increase in taxes on mining would not help reduce excessive exploitation as expected, representatives of mining companies agreed yesterday.
Mining company executives met to discuss amendments of the Ordinance on Natural Resource Tax (Ordinance) in a conference held by the Viet Nam Chamber of Commerce and Industry.
A number of tax increases are proposed in the draft amending Article 6 in the Ordinance which regulates taxes on natural resource exploitation. Increases would be imposed on mined metals, non-metals and gemstones. Natural gas and crude oil extraction would also be confronted with tax increases.
"Recently world mineral prices, especially coal and metal, have surged unexpectedly, which has boosted the occurrence of illegal and excessive exploitation," director of the Tax Policy Department under the Ministry of Finance Vu Van Truong said, in defence of the proposed tax increase.
In the first seven months of the year, export of apatite was 213,000 tonnes, or 96 times higher than last year’s volume. Receipts for those exports come in at US$17.5 million, which is 116 times higher than last year’s figure, according to Truong.
"Tariff levels established in the 1998 Ordinance have not kept up with the changing economic situation and have become unsuitable at the current time. As a result, there have been losses to the State budget."
Between 2002 and 2006 the State only collected an average of VND6.7 trillion ($406 million) per year in total taxes from all sectors, accounting for an unremarkable 7.2 per cent of the budget, Truong added.
All the participants in the meetin agreed that an increase in taxes was necessary to mitigate environmental management costs. However, they also believed the new tax proposal was too high and that there were other tools in addition to taxes the Government could use to more effectively control mineral exploitation.
"Weak natural resources management by relevant authorities has resulted in some cases of illegal mineral exploitation, causing waste and losses to the State budget; illegal exploitation is not entirely due to low taxes," said general director of the Phuoc Son Gold Ltd Co, Nguyen Xuan Tuong.
"The Government should have methods to encourage and protect the interests of companies that are in compliance with mineral exploitation regulations," he added.
Chairman of the Viet Nam Steel Association Pham Chi Cuong noted that higher taxes would force companies to raise prices to offset increased production costs, which in turn would result in less market competitiveness.
"Higher taxes could also exacerbate illegal exploitation to dodge the law," he added.
Tran Ngoc Anh from the Vinh Phuc Nikken Company said that the environmental protection awareness of companies would not be raised simply from a tax increase. In fact, before beginning mineral exploitation companies must submit comprehensive environmental impact reports that require approval by the Ministry of Natural Resources and Environment.
Companies are also required to make a $400,000 environmental protection deposit before commencing a mineral extraction operation, she continued. The deposit will not be returned if the funds are needed for environmental mitigation as a result of the mining process.
Mining companies suggested the maximum tariff imposed on profits for metal materials should be only 25 per cent, on natural gas 20 per cent and on coal 15 per cent.
A representative of the Viet Nam National Coal and Mineral Industries Group highlighted the fact that costs for coal production would rise in line with a tax increase, which would in turn lead to higher costs in other production sectors.
She said that limiting the volume of natural resources to be exploited would be more useful in stemming illegal exploitation than an increase in taxes.
VNN
|
