Vietnam Ministry Mulls over Raising Tax on Water

Vietnam’s Ministry of Finance has issued a document to collect ideas from other agencies to raise tax on water which is expected to vary between 2% and 5% from early 2016. The tax hike would be imposed on all kinds of water, regardless of bottled or natural water. The ministry expects to impose the ceiling tax rate on mineral water and natural water used for hydropower and tap water. The move is expected to raise the collection for the state budget by VND888 billion ($40 million) per year. In addition, the ministry also plans to raise tax on a number of natural resources. Raising tax is part of the government’s efforts to cover its budget overspending that often exceeds 5% of the country’s gross domestic product (GDP). Vietnam is facing drought in many parts of the country while people in remote areas unable to access safe water and urban dwellers suffer shortage of running water. The underground water resources are falling while the surface water is seriously polluted, local experts said. (Thoi Bao Kinh Doanh – Business Times Sept 11 p5, dwrm.gov.vn Sept 10)