The National Assembly has decided that new environment taxes will not be applied to cigarettes or ethanol petrol.
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| Deputies at the on-going National Assembly session |
A bill on environment tax, which went through November 15 at the on-going 8th National Assembly session in Hanoi, removed the items from the list of tax levied products.
According to a report by the Standing Committee of the National Assembly of Vietnam, some deputies suggested including cigarettes on to that list because they harm the environment.
However, the Standing Committee of the National Assembly of Vietnam stated that they needed synchronous and comprehensive measures to prevent and fight the harms of cigarettes. The law on preventing the harmful effects of cigarettes, which is being drafted, would apply more measures to prevent and punish those polluting the environment with cigarettes. According to the committee, these measures would be more appropriate than tax tools, which would virtually legalise the polluting effects of cigarettes.
In addition, the special consumer tax levied on cigarettes are already high at present 65%. Therefore, the standing Committee proposed not to apply environment taxes on cigarettes.
Regarding petrol, a deputy suggested to specify the kind of petrol to apply reasonable tax rate. The standing Committee has decided to spare taxing ethanol petrol E5, which is being recommended to use as it’s less harmful to the environment.
| Five groups of products to be subject to the new tax are petrol and oil, coal, freezing substances containing hydro-cloro-fluoro-carbon (HCFC), plastic bags and substances for plant protection. |
While some deputies proposed raising the taxes on plastic bags others argued there weren’t better alternatives.
However, seeing the urgent threat in the rampant use of plastic bags, the standing committee increased tax rates on the product by VND 20,000-30,000 (USD 1-1.5) per kilogram, to VND 30,000-50,000 (USD 1.5-2.5) per kilogram compared to the rate proposed at the 7th session.
Regarding coal, some deputies said the law makers should carefully consider each level of environment tax on particular coal products in accordance with the degree of harm to the environment. For example, atraxit coal is producing the biggest number of toxic substances so it was argued that taxes need to be raised. The standing committee has proposed an increased tax rate on atraxit coal by VND 10,000-30,000 (USD 0.5 - 1.5)/tonne, to VND20,000 – 50,000 (USD 1-2.5)/tonne.
The new laws on environment tax will become effective on January 1, 2012.
