Strengthening the fight against loss of mineral resource tax

In order to limit the widespread spontaneous mining activities that cause environmental pollution, tax evasion and environmental protection fees, our province has had many solutions to prevent tax losses and environmental protection fees for mineral exploitation and purchase activities, increasing revenue for the state budget....

Collecting taxes in the fields of land lease, natural resources and environmental protection fees in mineral exploitation in the province has always been a difficult and complicated field. According to 2010 statistics of the Department of Natural Resources and Environment, the province currently has over 330 units exploiting soil, stone, sand and gravel, including 57 state-owned enterprises, 261 enterprises in the private economic sector, 16 cooperatives, 12 units licensed by the Ministry of Natural Resources and Environment, and 281 units licensed by the Provincial People's Committee to operate in effect.

In recent times, although the Provincial People's Committee has directed all sectors and levels to strengthen management and prevent illegal exploitation, tax evasion, and environmental destruction, the management of resource tax collection and environmental protection fees for mineral exploitation is currently only possible for establishments with fixed locations.

White stone mining in Quy Hop.

The collection of taxes and environmental protection fees for individuals directly exploiting sand, gravel, soil and stone is almost unmanageable due to lack of planning, large areas, exploitation mainly by hand, and non-fixed locations, leading to non-declaration or under-declaration of quantity.

According to data from an inspection by the Waterway Traffic Police Department, out of 55 raw stone mining sites, only 5 units have been granted mining licenses by competent authorities. The remaining sites are mainly leased by ward and commune authorities and a "village fee" is collected monthly, quarterly or annually. In addition to the loss of revenue from resource taxes and environmental protection fees, there is also a loss of value-added tax and corporate income tax. (The estimated value of the amount of resources exploited for construction projects is nearly 500 billion VND/year).

Faced with the above situation, Nghe An Tax Department has developed a Project and advised the Provincial People's Committee to issue strict regulations on "management of resource tax collection and environmental protection fees for mineral exploitation and purchase activities in the area". The focus is on increasing self-awareness and attaching mandatory tax responsibilities to enterprises, organizations and individuals when exploiting and trading minerals.

The first solution proposed is to conduct a survey on the exploitation and purchase of mineral resources in the area. From there, a document is issued requesting organizations and individuals with mineral exploitation activities in the area to declare and pay resource tax and environmental protection fees for mineral exploitation activities according to regulations.

When purchasing mineral resources for production and business, organizations and individuals must have invoices from the seller. In case there is no invoice, the buyer must be responsible for declaring and paying resource tax and environmental protection fees on behalf of the miner for the amount of resources purchased without invoices. In parallel, the province established interdisciplinary inspection teams including the Tax Department, the Department of Natural Resources and Environment, the Police and the Market Management to inspect the transportation of resources and minerals in the area.

The implementation of the above solutions has contributed to raising awareness and attaching mandatory responsibility in declaring resource tax and environmental protection fees for businesses and individuals when exploiting and trading mineral resources.

Thanks to that, the collection of resource tax and environmental protection fees for mineral exploitation activities in Nghe An province increased by 18 billion VND in the first 6 months of 2009, increased by 25 billion VND in the first 9 months of 2010, and by the end of April 2011 reached 48 billion VND, increasing to 30 billion VND. It is expected that in the following years, the average increase will be about 35-40 billion VND.

According to the construction industry's forecast, in the coming years, the demand for soil, stone, sand, and gravel for construction, site clearance, as raw materials for the production of construction products, and mineral resources will continue to increase with the province's economic growth rate. It is estimated that each year the province needs about 2 million m3 of soil, 10 million m3 of stone, sand, and gravel of all kinds for construction activities, hundreds of thousands of m3 of white stone, 4,000 tons of tin, etc. Therefore, it is necessary to continue to strengthen measures to manage the collection of resource taxes and environmental protection fees, and increase revenue for the provincial budget.

Khanh Ly