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Friday, July 1, 2022

Finance minister says will mull tax cut to lower petrol prices

The Saigon Times

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HCMC – Minister of Finance Ho Duc Phoc, addessing the National Asembly sitting on June 2, said that the ministry was considering tax reductions to lower prices of fuel products, now that high fuels prices are affecting the people’s livelihood and businesses.

In his report delivered at the NA sitting, the minister gave answers on three issues of public concern, namely State budget collection, taxes on real estate and securities businesses, and tax reduction for fuels.

As oil prices hit all-time highs yesterday, the Finance Ministry will make a report on tax reduction for submission to the Government and the NA Standing Committee for a final say on lowering tax rates for oil products, Lao Dong reports, citing the Finance Minister.

Phoc pointed out that tax reduction is just one of several measures to lower the prices of oil products.

Tax currently accounts for some 28% of fuel prices. The environment tax on oil products has recently been halved, but the reduction of other taxes like value-added tax, special consumption tax and others rests with the National Assembly’s authority, Minister Phoc said.

However, he is also worried that lowering fuel prices will stimulate smuggling once local prices become lower than in neighboring countries. Vietnam’s petrol prices are currently some VND11,000 per liter lower than in Laos, and are also less expensive than in Cambodia and Thailand, so relevant agencies need to tighten control over smuggling across the border.

Furthermore, to lower fuel prices, it is essential to boost supply, and therefore, there should be plans to raise output of two oil refineries, Nghi Son and Dung Quat.

In his report, the minister also outlined issues relating to the State Budget, real estate and securities trading.

Phoc said last year saw the budget revenue increase 3.9% year on year to VND1,568 trillion, exceeding the annual target by 16.8%.

He specially highlighted tax evasion in real estate trading, saying the problem has become widespread. There is one known case a property deal was valued at VND10 billion, but the parties involved claimed it at only VND500 million to evade tax. Relevant competent agencies are now taking measures to minimize such illegal practices, even by pressing criminal charges against violators, he said.

Minister Phoc also said that given irregularities in securities trading, relevant authorities are drafting measures to deal with loopholes.

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