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Ministries considering raising import tax, not slashing petrol price
The Ministries of Finance, Industry and Trade are considering scenarios for petrol pricing, as the world’s crude oil price has fallen down further to over $60/barrel. The ministries are leaning towards the project on raising the import tax in order to collect more money to the state budget, instead of adjusting the retail price.
The import tax rate is expected to increase from the current 5% to 10%.
When the oil and petrol prices decrease, the ministries either raises the tax to offset the money the state spends before to keep the domestic petrol prices unchanged despite the world’s price increases, or slashes the retail petrol prices to ease the burden on consumers. And the ministries may raise tax this time.
According to the Ministry of Finance, the continued oil price decreases over the last time has affected Vietnam’s oil exports. The decreased income from oil exports has made the state treasury thinner.
Meanwhile, the domestic petrol price has been lowered three times by VND 1,500/litre. The state has shared difficulties with consumers by slashing petrol prices, and it is now the consumers’ turn to shares the difficulties with the state by raising the import tax to increase the budget collection.
On September 15, the Ministry of Finance re-imposed a tax on petrol imports, raising the tax from 0% to 5%. However, the tax increase proves to be not sufficient enough to offset the tax collection decreases that happened at the time when the 0% tax rate was applied.
Deputy General Director of Petrolimex Vuong Thai Dung said that Petrolimex advocates the decision to increase the tax by the State. “When the crude oil price decreases in the world’s market, Vietnam’s oil exports will also suffer,” Dung said.
OPEC late last week announced it would cut the output by 1.5mil barrels a day, but the announcement has not helped push prices up. The world’s price has dropped to the 17-month low at $60/barrel.
VNN
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