Vietnam Imposes Environment Tax on Five Product Groups from Jan 1

The Vietnamese government started imposing environment tax on five groups of environmentally-unfriendly products from Jan 1, 2012 in a move to protect the degrading environment. The tax is applied on petroleum, coal, hydro chlorofluorocarbon liquid (HCFC), plastic bags and chemical pesticides, with each product being subject to a separate tax rate. As petroleum products like gasoline, jet fuel, diesel oil, kerosene and mazut oil are now subject to fuel surcharge, when the environment tax takes effect, fuel surcharge will be removed, and the environment tax will be levied at the same level as the current fuel surcharge. A minimum tax of about VND6,000-VND30,000 per ton will be imposed on coal retailing, while plastic bags will have to bear a tax of around VND20,000-VND30,000 per kilogram. Due to various prices of chemical pesticides such as those used on farm crops, anti-termite spray, forest produce preservatives, and warehouse disinfectants, the average environment tax rate to each product will range from VND500-VND5,000 per kilogram.  Tax payers are consumers, producers and importers of such environmentally-unfriendly products. The taxation is expected to raise not only the state budget but also social awareness of environment protection, experts said, adding that the NA’s Finance and Budget Commission estimates yearly revenues from environment tax will be from VND14.3 trillion ($671.36 million) to VND57 trillion. (Sai Gon Giai Phong –Saigon Liberation Jan 2)