Public displeased with MOF’s tariff hike on petrol imports
Public displeased with MOF’s tariff hike on petrol imports
The Ministry of Finance (MOF) has raised the tariff on petroleum imports twice within one month in an effort to balance state revenue, but experts have disagreed with the decision.
The prices of petrol products decreased slightly at 4:30 pm on January 6. Diesel prices have fallen by VND360 per liter to VND16,630, RON 92 petrol by VND310 per liter to VND17,570, and kerosene by VND290 to VND17,110 per liter.
The modest price decreases have disheartened people, who expected sharper cuts.
The representatives of petroleum import companies explained that they cannot slash the selling prices in accordance with the world’s prices, because of the high tax.
MOF decided to raise the import tariff on petrol by 8 percent, on diesel by 7 percent and kerosene by 9 percent to 35 percent, 35 percent and 30 percent, respectively.
In early December 2014, MOF raised the import tariffs (by 9 percent on petrol and diesel and by 10 percent on kerosene) to balance the tax revenue decrease.
As such, just within one month, the import tariff increased by nearly 20 percent. Every liter of RON 92 petrol bears VND6,149 in import tax, VND1,757 in luxury tax (10 percent) and VND1,000 in environmental protection fee.
“The price decreases were too low, while the tax increases are too high,” commented Ngo Tri Long, a renowned pricing expert.
He went on to say that the move taken by MOF showed that in the eyes of the ministry, increasing the state budget revenue is still the priority task, but it does not strive to harmonize the benefits of the involved parties – consumers, the state and enterprises.
Dr. Dang Dinh Dao, former head of the Hanoi Economics University’s Institute for Economics Research and Development, noted that though raising tax is considered an effective solution to help improve the state budget revenue, the sharp rise in tax within a short time “goes beyond the economy’s and people’s capability”.
Head of the Central Institute of Economic Management (CIEM) Nguyen Dinh Cung noted that if Vietnam continues raising tax, it would hinder expected positive impact on the economy.
The global oil price plunge is believed to do more good than harm to the Vietnam’s economy, because it helps stimulate demand, and therefore push up local production.
Responding to the criticism, an official of MOF said that if the ministry did not raise the import tariffs, the state budget revenue loss would be as high as VND43 trillion in 2015.
