Increasing taxes will reduce coal exports.

The Vietnam Coal and Mineral Industry Group (TKV) argues that increasing the export tax on some types of coal to 13% will reduce coal exports in the last six months of the year to 3 million tons instead of 7 million tons, causing a loss of approximately 500 billion VND for the state from resource tax, environmental fees, and value-added tax.

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Previously, the Ministry of Finance issued Circular No. 71/2013/TT-BTC stipulating that from July 7th onwards, the export tax on certain types of coal such as anthracite, briquette coal, coke and semi-coke (produced from coal), lignite or peat, whether or not agglomerated, will be increased from 10% to 13%.

Mr. Nguyen Van Bien, Deputy General Director of TKV, said that in the first six months of 2013, TKV exported 7 million tons of various types of coal. TKV projects to export an additional 7 million tons in the last six months of the year.

However, the increase in coal export tax from 10% to 13% has slowed down this company's coal exports. To avoid losses, TKV is forced to increase export prices, so many customers will stop buying coal from TKV and switch to buying from other countries with more competitive prices.

According to Mr. Bien, TKV is expected to export only 3 million tons in the last six months of the year, a decrease of 4 million tons compared to the plan.

"If we export 3 million tons of coal with a tax rate increased to 13%, we would collect an additional 130 billion VND in taxes. However, the revenue from resource tax, value-added tax, and environmental fees would decrease by 4 million tons, with an estimated revenue reduction of up to 500 billion VND," Mr. Bien said.

Regarding coal prices for electricity generation, Mr. Bien stated that according to the roadmap, coal prices for electricity generation will have to be adjusted further because currently, the price of coal for electricity generation is only 85-87% of the production cost of coal in 2013. Therefore, coal prices for electricity generation will soon be adjusted upwards to compensate for costs, according to market mechanisms.

Previously, on April 20th, TKV increased prices by 27%, causing significant difficulties for many coal-fired power plants, as coal currently accounts for 50-70% of electricity production costs.

According to baocongthuong - PH