National Assembly (NA) delegates discussed a bill on natural resource tax October 21, the second day of the 12th National Assembly’s sixth session.
Taxation on natural resources is currently being carried out under the Ordinance on Natural Resources issued in 1998 and revised in 2008, but the ordinance has yet to meet the needs of the country’s development and should be amended, the Government said in a statement delivered at the meeting.
High taxes for non-recyclable resources
According to the bill, natural resources are national property that are managed by the State. Every organization and individual that uses natural resources must pay tax on them, the Government said.
Revenue from the tax goes to the State budget and is spent on improving the environment, and building and repairing infrastructure facilities at resource extraction sites, it said.
The bill also species taxes for metal mineral, non-metal mineral, crude oil, natural gas, coal gas, natural forestry products, natural sea products, water and others.
The bases for taxation are the actual volume of exploited natural resources, taxable prices and tax rates. Taxable prices are selling unit prices (not including VAT) of exploited natural resources.
The bill also stipulates that all natural resources must be taxed, and that higher rates be levied on non-recyclable natural resources. Lower rates would apply to recyclable natural resources.
Currently, tax is levied according to the type of natural resource. There is no tax on water used for agriculture, forestry, fishery, salt production and daily living. Taxes of 20-40 percent are levied on other types of natural resources, however.
Control over exploitation of natural resources would be strengthened and help protect natural resources from pollution, said the NA’s Financial and Budgetary Committee in an assessment report on the bill.
Regarding underground water, there were two different suggestions from the committee. One recommended that a tax be imposed for users of underground water in order to prevent its waste; while the other suggested there should be no tax to encourage people to use clean water.
Debate on who should decide tax rates
The bill stipulates that the Government should have the authority to decide tax rates, but most members of the Financial and Budgetary Committee said that would be unreasonable. They said only the NA had the right to make decisions related to tax policies, including tax rates.
Many delegates, including those from Hanoi, agreed with the Committee that in the near future, the NA Standing Committee should determine tax rates for each type of natural resource, and in the long run, every tax rate should be included in the law.
They also suggested narrowing the range of tax rates, which they said was currently too wide.
Meanwhile, many Ho Chi Minh City delegates agreed on a section of the bill stating the NA should be the sole body to determine the range of tax rates and the Government should rule on specific tax rates.
Highest tax rates should not be lowered
Under the bill, maximum tax rates would increase for some types of natural resources and would be lowered for other groups.
Delegates Tat Thanh Cang of HCM City said that such an increase or decrease must be based on each kind of natural resource. “Tax rates should be high for natural resources of which the exploitation is not encouraged,” he said.
Many members of the Financial and Budgetary Committee said that exploitation of natural resources brings big profits but the amount of tax collected in this field remained modest. It was not even enough to cover the cost of problems resulting from the exploitation.
Therefore, they suggested the NA retain the maximum tax rates and increase rates on non-recyclable natural resources in order to improve the State budget’s capital and ensure the sustainable development of natural resources.
