Ministry slashes coal tax in bid to clear stockpiles
Ministry slashes coal tax in bid to clear stockpiles
The Ministry of Finance has cut the coal export tax from 13 per cent to 10 per cent in a move to help coal producers reduce their high stockpiles. Under Circular 124/2013/TT-BTC, the tax cut takes effect this week..
The move was made following a proposal from the country's largest coal producer, Vinacomin. The group asked the Government to revoke a July hike in export tariffs, saying this had had a disastrous impact on its business.
According to the group, since the Government raised coal-export tax from 10 per cent to 13 per cent in July, its coal export volume has dropped to only 120,000 tonnes a month, only a tenth of the previous amount.
The group said the rise in tariffs meant that export prices had to increase significantly. Taxes and fees now make up 30 per cent of the production cost of export coal, and 20 per cent of coal sold to domestic customers.
To avoid loss, Vinacomin had to raise coal export price, making its products less competitive in the wake of low world demands.
The Industry and Trade Ministry also reported that coal exports in July fell by 91 per cent in volume and 80 per cent in value compared to June. Coal exports in the first seven months of this year reached 7.8 million tonnes, grossing US$561.4 million.
Due to the low demand, the group estimates it had stockpiled about 7.9 million tonnes of coal at the end of August.
The group claims that it can only export a maximum of one million tonnes of coal in H2, down six million tonnes against the first half. It further claims that this will cause a loss of thousands of billions of dong to the State budget.
Vinacomin said it expected to sell about 2.9 million tonnes of coal this month while producing 3.2 million tonnes.
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