The Law on Environmental Protection Tax will come into force from January 1, 2012. General Department of Taxation deputy chief Cao Anh Tuan tells VIR how the landmark law will impact on firms and consumers.
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Does the environmental protection tax imposition entail a hike on petroleum prices as well as firms’ input costs?
As estimated, total revenue from environmental protection tax collections in 2012 will come to around VND17 trillion ($809.5 million), with around VND16 trillion ($762 million) coming from petroleum sector.
The revenue from petroleum products’ environmental protection tax collections will not increased compared to existing petroleum fee collection amount since in light of the Resolution on Environmental Protection Tariffs just released by National Assembly’s Standing Committee the fee amount towards petrol and aviation fuel is set at VND1,000 per litre, for diesel oil VND500 per litre, for kerosene, mazut and grease VND300 per litre which are tantamount to current petroleum fee levels.
With a proposed environmental protection tax VND1,000 per/litre of petrol, consumers will have to additionally pay VND100 for the value added tax imposed on environmental protection fee when buying petroleum products. Is that the case?
In the supplemented and amended draft to governmental Decree 123/2008/ND-CP on value added tax implementation the Ministry of Finance has proposed to exclude environmental protection tax when calculating petroleum products’ value added tax and it now awaits the government consideration.
Plastic bag usage is also subject to environmental protection tax payment. Will this scale up burdens on consumers?
The Environmental Protection Tax Law works for environmental protection cause and then it bars individuals and organisations from using products which could hurt the environment. The Standing Committee has decided on imposing environmental protection tax rate of VND40,000/kg of plastic bags after it has mulled over all possible implications on firms and people’s lives.
Should there be policies to stimulate production of plastic bag alternatives?
In fact, use of products replacing plastic bags is fairly costly. However, its cost will gradually go down. Under current regulations firms making eco-friendly products are subject to tax breaks. The Ministry of Natural Resources and Environment will soon uncover a list of products on par with environmental protection requirements which are tax free. These products will carry more reasonable price tags in the coming period.