Vietnam set to impose green taxes on emissions, plastic bags

Vietnam will put environmental taxes on environmental pollutants or on goods whose use produces such pollutants, including gasoline, oil, grease, coal and plastic bags, starting on the first day of 2012, a highly experienced tax specialist said Wednesday.

Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultants’ Association, former deputy head of the General Tax Administration, was speaking at a workshop in Ho Chi Minh City, held to make the country’s Environmental Tax Law known more.

Her association co-organised the seminar with the Britain-based Association of Chartered Certified Accountants (ACCA).

She listed the eight taxable subjects as 1) gasoline, oil, grease; 2) coal; 3) Hydrogen-chlorofluorocarbon liquid (HCFC); 4) taxable plastic bags; 5) herbicides that are restricted from use; 6) pesticides that are restricted from use; 7) forest product preservatives that are restricted from use; and warehouse disinfectants that are restricted from use.

Among them, the rate on plastic bags is the highest, VND30,000 – VND50,000 per kilogram, she said. The former deputy head of the General Tax Administration added plastic bag is a serious pollutant. She said the green taxes would be imposed on some activities and things like solid waste and mineral mining.

Regarding law making and enforcement, she said the Vietnamese legislative body and government are of the view that the implementation, monitoring and analysis procedures are as thorough as possible, to improve the transparency and effectiveness of such taxes and to be the practical guideline towards sustainable development.

However, a decree on how to accomplish the law is not available yet, Cuc said, adding that the government is working on it.

Joining her as another key speaker at the workshop was Chas Roy-Chowdhury, head of Taxation Department, Association of Chartered Certified Accountants (ACCA). He shared lessons learnt from the UK and European Union.

“Green taxes need to be transparent, unambiguous and consistent in order to achieve the environmental protection goals. The taxes also need to make the public and business community understand that the taxes are going to raise not only the governmental income but also the social awareness of environment protection,” he said.

He said if environment taxation lacks international co-ordination, it will not impact global pollution levels, as companies will simply relocate and move the pollution problem with them, he added.

The tax specialist said once Vietnam started the green tax law, it would to some extent affect foreign direct investment inflows into the country, but a must is transparency, and Vietnam should pursue its sustainable development policies.

According to him, Vietnam should raise the awareness of this taxation. Public trust in the green tax system is vital. The government and policy makers need to create a balance between companies’ desire to maximise profit and the environmental protection goals.

More than 200 people including CEOs and CFOs took part in the workshop. The participants raised lots of tax-related questions to the two speakers.

The workshop is repeated in Hanoi on July 7, 2011, also with the two speakers. – VIR