Vietnam Reintroduces Tax On Imported Gas

by Mary Swire, Tax-News.com, Hong Kong

16 September 2008

The government of Vietnam has announced the reintroduction of a tax on imported petroleum products to offset state subsidies of these products.

A document signed by Finance Minister Do Hoang Anh Tuan last week confirmed that the 5% import tax will be reinstated as of September 15, 2008.

The tax will apply to a number of imported petroleum products, including unleaded petrol, aviation fuel and crude oil.

The government removed the 5% tax on these imports in May last year as rising global oil prices caused import costs to surge. However, now that the price of a barrel of oil has retreated back down to USD100 per barrel, the government made its intention known last month to reintroduce the tax to help pay for losses borne by importers who must sell petroleum products on at government-controlled prices.

It has been estimated that the government has foregone USD1.5bn in revenues by freezing the tax, and that importers lost USD854mn in the first six months of the year owing to the difference between imported prices and domestic retail prices.

Recommended