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Ministry halves coal export tax
Coal export tax will be halved from February 15, the Ministry of Finance (MoF) announced on Thursday.
The move to cut the tax from 20 per cent to 10 per cent came on the heels of a proposal from the Viet Nam National Coal and Mineral Industries Group (Vinacomin). The proposal argued that a tax cut would help the coal industry to boost capital for reinvestment. Up to now, the industry has been forced to sell coal to the country’s four biggest coal consumers namely power, cement, fertiliser and paper producers, at cheap prices.
Thanks to the Government’s intervention to regulate prices and stabilise the market; cement, fertiliser and paper companies have all benefited from artificially low coal prices, according to Vinacomin. The price now paid by the companies is half the coal export price.
Power producers get even better rates. Prices for coal are only 55 per cent of those charged to other domestic coal consumers, and only 45 per cent of the coal export price.
This year, the four biggest coal consumers are estimated to consume roughly 21.5 million tonnes of coal. The power industry will need 8.4 million tonnes – more than any other sector.
The country expects to export roughly 19.5 million tonnes of coal this year, according to the Ministry of Industry and Trade.
Lower petroleum duties
On Thursday, the Ministry of Finance also decided to cut preferential tax rates on imported petroleum to 25 per cent from 35 per cent, effective from next Tuesday.
However, both officials and petrol importers estimate that the tax cut would help to reduce losses for petrol importers, but is not likely to make petrol importers cut their retail prices.
The Deputy Director of the finance ministry’s Price Management Department, Nguyen Thanh Huong, said that although the price of crude oil was down to around US$40 per barrel, petroleum prices were on the rise. Prices of petroleum products are now roughly 30 per cent higher than the average price in December last year.
Therefore, Huong said it was irrational to ask petrol importers to cut prices at this time, saying that the import tax cut could help petrol importers to reduce losses, but not to cut their retail prices.
Deputy Minister of Industry and Trade Nguyen Cam Tu also revealed that authorities were struggling to calculate a fair and accurate price for petroleum products based on crude oil prices.
Tu explained that the fixed difference between prices of crude oil and petroleum products kept changing erratically.
Deputy General Director of Petrolimex Vuong Thai Dung said petrol importers were still losing more than VND1,000 per litre. Because of this, he said, it is difficult for his company to cut retail prices. Petrolimex supplies about 60 per cent of the country’s petrol demands.
VietNamNet, VNS
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