Tax increase, coal export volume will decrease

Vietnam National Coal and Mineral Industries Group (TKV) said that increasing export tax on some types of coal to 13% will reduce the amount of coal exported in the last 6 months of the year to 3 million tons instead of 7 million tons, causing a loss of about 500 billion VND to 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 7, export tax on some types of coal such as coal, briquettes, coke and semi-coke (made from coal), lignite or peat, whether or not briquetted... will increase from 10% to 13%.

Mr. Nguyen Van Bien, Deputy General Director of TKV, said that in the first 6 months of 2013, TKV exported 7 million tons of coal of all kinds. TKV plans to export an additional 7 million tons in the last 6 months of the year.

However, the increase in coal export tax from 10% to 13% has slowed down the coal export of this enterprise. 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.

It is expected that in the last 6 months of the year, TKV will only export 3 million tons, a decrease of 4 million tons compared to the plan, Mr. Bien said.

"If 3 million tons of coal can be exported with a tax rate increased to 13%, additional tax revenue will be collected by 130 billion VND, but revenue from resource tax, value added tax, and environmental fees will decrease due to a decrease in volume of 4 million tons, the estimated revenue reduction will be up to 500 billion VND," said Mr. Bien.

Regarding the price of coal for electricity, Mr. Bien said that according to the roadmap, the price of coal for electricity will have to continue to be adjusted because the current price of coal for electricity is only 85-87% of the cost of coal production in 2013. Therefore, the price of coal for electricity will soon be adjusted to increase to compensate for costs, according to the market mechanism.

Previously, on April 20, TKV increased the price by 27%, causing many coal-fired power plants to suffer because coal prices account for 50-70% of the cost of electricity production.

According to baocongthuong - PH