Resources tax increase meets resistance

15-Sep-2015 Intellasia | VET | 6:00 AM Print This Post

A new draft resolution on the resources tax calls for rates on many resources to be increased significantly.

According to the Ministry of Finance this is to reduce the exploitation of non-renewable resources with high economic value and ensure a balance of interests between the State, businesses, and people living near mines.

The adjustment in the draft would raise resources tax collections by VND3.171 trillion ($141.08 million) compared to 2014. Different opinions have come from ministries and stakeholders on the matter.

The Ministry of Natural Resources and Environment has issued a document in response, requesting only a basic increase to taxes.

Vietnam has the highest tax rates among Asean countries and other countries with a similar minerals industry.

China is one of the leading exploiters of mineral, it wrote, but its tax rate is only around 5 to 10 per cent.

Tax calculations are considered inappropriate, with methods varying between provinces and the gap can be huge.

In agreement, Dr Nguyen Canh Nam from the Vietnam Mining Science and Technology Association said that the increase comes from both the types of taxes applied and their rates.

The situation facing the mining sector is becoming more difficult, increasing costs and affecting the business activities of mining companies.

Many are forced to adopt methods that are harmful on the environment in order to record a profit.

“The State budget earning more revenue from mining taxes is resulting in a huge amount of minerals remaining underground,” he said.

Le Van Lich, Chair of the Titan Association of Vietnam, said that in recent years mining companies have faced many difficulties but taxes and fees continue to increase.

Data from the association also shows that even the lowest taxes and fees can account for as much as 40 per cent of the product price.

Meanwhile, the market for titanium products is declining and the sales price is falling sharply.

Besides taxes, mining companies must also pay fee such as licenses.

These are imposed on the exploitation of one tonne of ore but only 45 to 60 per cent of this is useful.


Category: Legal

Print This Post

Comments are closed.