ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Vietnam natural resources-based firms to face new tax hike
Publication Date : 22-08-2013
Deputy Finance Minister Do Hoang Anh Tuan has proposed increasing tax rates by up to 8 per cent for 15 out 54 natural resource categories.
"The adjustment was expected to boost State management of natural resources and ensure the economic benefits of the state, the mining and refineries sector and citizens living in areas with a high endowment of natural resources," Tuan told the National Assembly Standing Committee.
Under the proposal, iron taxes will increase to 13 per cent, a 3 per cent rise on current rates applied since 2010. Similarly, titanium taxes will be raised from 11 to 16 per cent; gold from 15 to 22 per cent, wolfram and antimony from 10 to 18 per cent, copper from 10 to 15 per cent and nickel, from 10 to 12 per cent.
Soil for brick production is also set to increase from 7 to 10 per cent, while sand, stone, gravel and coal will be up by 1 to 2 per cent.
The move aims to encourage firms to shift to more efficient and sustainable technologies, whilst providing a significant windfall to the State's annual budget.
Estimates show that thanks to this adjustment, roughly VND2.279 trillion (US$108million) will be added to the State's budget next year, up from the VND41.3 trillion ($2billion) collected last year.
"The higher tax would help encourage enterprises to upgrade technology and use natural resources more efficiently," Tuan said.
Phung Quoc Hien, chairman of the NA Financial and Budgetary Affairs Committee, said the proposal did not cover metals that were low in natural reserves but were being exported in high-volume as raw materials; such as platinum, silver and tin.
Meanwhile, modest tax increases were proposed for natural resources deemed precious and non-renewable, he said, adding the committee was urging the Government to review mining in the resources sector in light of limited reserves, high pollution, low processing capabilities and the need for more ‘value-adding' projects.
Hien agreed to increase natural resource taxes to harness the economic benefits but advised that a long-term road map was needed to give certainty to businesses.
Chairman of the NA Judiciary Committee Nguyen Van Hien warned the higher taxes could negatively affect mining activity, given most resources were being mined and exported as low-priced raw materials.
He urged closer monitoring at the national level rather than local level, due to localities granting mining licences resulting in fewer benefits and high pollution.
Deputy Chairman of the National Assembly Huynh Ngoc Son, and Chairman of the NA Economics Committee Nguyen Van Giau expressed concerns that the higher taxes would burden enterprises at a time of economic slowdown - forecast to recover in 2015.
Deputy NA chairwoman Nguyen Thi Kim Ngan requested the Government prepare an alternative proposal for natural resource taxes in line with international standards; minimising damage to the sector whilst ensuring benefits for the State, companies and citizens.
The committee's 20th session wrapped up after 10 working days, with reports on a financial mechanism to be built by the State Treasury.