Vietnam to Levy Environment Tax on Fossil Fuels, HCFC, Plastic Bags from 2012

The Vietnamese authorities are planning to levy an environment tax on any enterprise or individuals who produce and use or import fossil fuels such as petroleum and oil, coal, plastic bags from 2012, state media reported Jan. 22. The Finance Ministry and the National Assembly (NA)’s Financial and Budgetary Committee is working on a draft law, under which petrol and oil, coal, freezing substances containing Hydrochlorofluorocarbon (HCFC), plastic bags and substances for plant protection. Head of the Finance Ministry’s Department of Tax Policy Vu Van Truong said at a seminar if the law is passed and enforced by the assembly in October 2011, it would become effective on January 1, 2012.
Once effective, the environment tax of VND1,000-VND4,000 will be levied on one liter of petrol, VND500-VND2,000 on one liter of diesel oil, VND6,000-VND30,000 on one ton of coal, VND20,000-VND30,000 on one kilogram of plastic bags and between VND1,000 and VND5,000 on one kilo of plant protection substances.
The law will help boost environment protection, reduce harmful effects on public health and generate budget for the activity of environment protection, Truong told the seminar.
Vietnam spends some VND4 trillion ($216.5 million) from the state budget for environment protection each year, but the fees on environment protection collected annually is only VND1.2 trillion.
Truong said that Vietnam will be able to collect some VND50 trillion ($2.7 billion) from the taxes a year, which will be re-invested into environment protection activities.