HA NOI — Minister of Finance Vuong Dinh Hue told a conference here on Tuesday that the ministry is considering whether to cut the import tax on cooking gas in order to assist gas distributors to lower retail prices.
|Petrovietnam Technical Services Corporation's engineers check a gas pipe. The Ministry of Finance is considering whether to cut the import tax on cooking gas in order to assist gas distributors to lower retail prices.— VNA/VNS Photo Ha Thai
Hue said the ministry's tax policy department had promoted cutting the tax even before the Government Office received the recent letter from the Viet Nam Gas Association (VGA) urging import taxes be lowered from 5 per cent to 2 per cent. The Government Office has formally forwarded the letter to the ministry for consideration.
He noted that the 5-per-cent rate had only been applied since the beginning of the year, while Europe has suffered a severe winter which could drive heating oil and gas prices higher.
Any adjustment would therefore be based on long-term policy goals and would take into account the impact of gas prices on other goods, Hue said.
The minister said the finance departments in HCM City and Ha Noi had begun auditing operations of gas companies to clarify whether recent retail price hikes were appropriate and justified in the context of global prices.
The director of the ministry's price management department, Nguyen Tien Thoa, said the investigation aimed to clarify rising gas prices over the past few months, and Thoa noted that five of the seven gas distributors had already been investigated.
VGA chairman Ho Sy Thang has long urged a reduction in import taxes to help gas retailers get out of difficulties, noting that the VGA has made three proposals to the ministry and the Prime Minister since 2010 to reduce import taxes from 5 to 2 per cent, saying the change would help stabilise prices and curb inflation.
VGA general secretary Tran Van Thanh said the associations'280 members would reduce prices if the lower tax were approved.
The ministry, however, has countered that the higher tax rates were necessary to slow imports at a time of rising global prices.
PetroVietnam Gas and Saigonpetro Gas last week cut gas prices by VND12,000 (US$0.60) per 12kg canister. — VNS