Draft environmental tax law circulated
HA NOI — The latest draft Environment Protection Tax Law has just been introduced in order to get opinions from experts and citizens before it is proposed to the National Assembly in May.
Vu Van Truong, head of the Ministry of Finance's Tax Policy Department, said that environmental pollution had become serious problem. It was time for the country to not develop the economy at all costs, but to develop sustainably with environment-friendly production. So the environmental tax would encourage people to minimise their use of products that are harmful to the environment.
Under the draft law, five groups of products would be subject to a tax, which includes petroleum, oil, coal, substances containing hydro-chlorofluorocarbons (HCFC's), plastic bags and fertilisers.
Each of the different product categories will comply with different tax regulations. An environmental tax of VND1,000-4,000 will be imposed for each litre of petrol; VND500-2,000 for each litre of diesel; VND6,000-30,000 per tonne of coal; VND1,000-5,000 per kilo of HCFC; VND20,000-30,000 per kilo of plastic bags; and VND500-5,000 per kilo of fertilisers.
Opponents of the draft claim that the new regulations will result in unfair taxes on individuals and enterprises who produce, use or import products that are within the five categories.
The consumers of these products will be responsible for paying these taxes because the taxes will be taken into account for the prices of the products.
Truong said that applying these taxes would not make a large impact on people's consumption and spending habits.
If one person buys a refrigerator worth VND2 million (US$105), he will have to pay VND1,000 in taxes.
Pham Van Khanh, director of Ha Noi's Environment and Natural Resources Department, said that paying such taxes on the products which do harm to the environment would help the consumers think twice and make smart choices before deciding to buy these products. Eventually, they prefer not to buy these types of products.
"Instead of using plastic bags, consumers will use hand-baskets to carry their goods," he added.
Some experts expressed concern about applying environmental taxes to petroleum and oil, which could potentially drive up the prices of these products.
Truong said that the special consumption tax on petroleum and oil would not be applied when the environmental tax takes effect.
Experts disagreed about applying higher taxes on petroleum than on diesel fuel, which pollutes more.
Truong said that people who primarily used diesel were fishermen, so it was impossible to levy higher taxes on this population.
He added that the necessary changes would be based on experts' opinions to make the law more feasible. — VNS