Import taxes to help control petrol prices

Deputy minister of Finance Hoang Anh Tuan on Monday promulgated a decision to adjust the preferential import tax rates according to world petrol prices.

The world petrol price used as the basis for applying the preferential import tax rates is the West Taxes Intermediate (WTI) crude oil price on the Singapore market.

Under the decision, an import tax of 30 per cent would be applied for gasoline, petroleum and aviation fuel when the WTI price fluctuates from US$45 to $60 a barrel. Diesel oil will have a tax of 25 per cent imposed.

When price hovers between $60 to $70 a barrel, the import tax of those products will be reduced to 25 per cent and 20 per cent for diesel oil.

If the WTI price ranges from $75 to $95 a barrel, the import tax will be lowered to 20 per cent and 15 per cent, respectively.

According to the ministry, when the world petrol price fluctuates, an average petrol price will be decided based on the global petrol price over 30 consecutive days. A new import tax rate on petrol and other products will be applied corresponding to the new price.

It also added that the levels would be considered as a basis for petroleum suppliers to actively map out their business plans.

It said the tax levels would be adjusted specifically depending on the ministry in case the domestic and world prices violently fluctuated below $45 or above $95 a barrel.

However, the ministry said the import tax would be capped at 40 per cent.

Luu Duc Huy, head of the ministry’s Tax Policy Department said the newly released document was merely a guidance, and specific instructions on real prices would be forth-coming.

The new tax frame was reduced to three levels ranging from $45 to $95 a barrel instead of previous seven levels which range from $48 to $109 a barrel.

VietNamNet/Viet Nam News

Tags: Vietnam finance news, Vietnam import taxes