Lost oil and fuel duty revenue amounts to 10tr dong by Oct

01-Dec-2016 Intellasia | The Saigon Times | 6:00 AM Print This Post

The government’s oil and fuel duty policy had led to revenue losses of about VND10 trillion in the year to October, says the general Department of Customs.

The customs believes that apart from lost revenue from the world oil price plunge, sharp tariff cuts for fuel imports from a number of countries made up a significant proportion of the VND10 trillion. This is evident in the free trade agreements (FTA) such as Vietnam-South Korea and Vietnam-Asean. Importers have been shifting to buying fuels from those markets enjoying low Vietnam duties.

Diesel oil 0.05S is mainly supplied by other Southeast Asia countries like Singapore, Malaysia and Thailand given a zero tariff under the Vietnam-Asean FTA. Meanwhile, diesel oil 0.05S imports from the Middle East are subject to a 7 percent duty and 5 percent from South Korea. Gasoline is mainly imported from South Korea thanks to a Vietnam tax of 10 percent, ten percentage points lower than in other markets.

This is why Vietnam’s fuel imports from the markets enjoying the low tariffs account for over 80 percent of the total import of 9.53 million tonnes.

Consumers have not benefited from 0 percent or 10 percent tariffs because the base fuel prices are currently calculated based on the average import price, tax and other charges, and used as a basis by traders to determine retail prices.

Rules allow traders to set a price lower than the base level but 29 major fuel trading firms quote the same price using the benchmark set by Petrolimex which holds a market share of nearly 50 percent.

Consumers actually have to buy fuels at high prices despite tax cuts.

http://english.thesaigontimes.vn/51103/Lost-oil-and-fuel-duty-revenue-amounts-to-VND10 trillion-by-Octoberhtml


Category: Economy, Vietnam

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