'Hot' issue of VAT, compensation for Formosa

(Baonghean.vn) - On the afternoon of October 11, the Ministry of Finance held a regular press conference for the third quarter. At the meeting, press agencies questioned leaders of the Ministry of Finance on "hot" issues such as VAT rates, compensation for Formosa's damages, and the price ceiling for milk...

According to some press agencies, the current collection of gasoline tax has a situation of overlapping tax, people have to pay tax with a proportion of more than 50% in the retail price structure of gasoline. Responding to this issue, Director of the Tax Policy Department (Ministry of Finance) Pham Dinh Thi said that the Ministry of Finance has submitted to the Government and the National Assembly on this issue, and each tax has a different adjustment target.

Overview of the press conference.

Not only Vietnam, but many countries in the world have issued such taxes. Specifically, currently for gasoline: when importing, enterprises will have to pay import tax, then pay special consumption tax (TTDB), then pay VAT at the import stage. Gasoline is also subject to environmental protection tax (VND 3,000/liter), gasoline price stabilization fund of VND 300/liter and finally VAT of 10% of the selling price.

Regarding VAT, Mr. Pham Dinh Thi said that Vietnam is currently one of the countries with the lowest VAT rates. We have an export tax rate of 0%, a low tax rate of 5% and a general tax rate of 10%. Meanwhile, China has an export tax of 0%, the lowest is 13% and the general rate is 17%. Some countries have very high VAT rates such as: Denmark has a tax rate of 25%, Italy 19%, France 19%... Right next to our country like Laos, if all taxes are added, the tax proportion in the price accounts for 56%, of which: import tax is 15%, special consumption tax is 2%, VAT 10%, road tolls 6-8%/liter of gasoline.

Regarding the new tax calculation method according to Decree 100/2016/ND-CP, Mr. Thi said that according to the new regulations applied from July 1, special consumption tax on gasoline products. "Therefore, the press information that the Ministry of Finance miscalculated the tax is incorrect. We request that the press re-inform accurately and honestly so that the masses can understand the current tax calculation method and in accordance with international practices" - Deputy Minister of Finance Nguyen Huu Chi said.

Change the new way of calculating special consumption tax on gasoline from July 1, 2016.

Also at the press conference, Deputy Minister Nguyen Huu Chi, representatives of the State Budget Department, the Price Management Department, and the General Department of Taxation answered many questions from the press on related issues such as: the situation of tax debt collection; inspection and examination of petroleum enterprises; support policies for fishermen in the four central provinces affected by the Formosa incident; and tax policies to support start-up enterprises.

The Ministry of Finance said that 3,000 billion VND has been temporarily transferred to 4 localities: Quang Binh was granted 1,100 billion VND, Ha Tinh 1,000 billion VND, Quang Tri 500 billion VND and Thua Thien - Hue 400 billion VND. The Ministry of Finance has instructed localities to set up independent accounts with the State budget, so that the money transfer takes place quickly, openly and transparently.

Red River