HA NOI (VNS)— Prime Minister Nguyen Tan Dung approved the Ministry of Finance's proposal to cut the from 20 per cent to 10 per cent to boost consumption.
|Coal is loaded at Ha Rang mine in the northern province of Quang Ninh. The export tax imposed on coal has been halved to 10 per cent. — VNA/VNS Photo Trong Dat
However, the tax would be increased as the world market recovers, the PM added.
The tax reduction was made as the finance ministry said the mining industry faced difficulties due to steep decreases in both domestic demand and exports. The coal industry had an unsold inventory of 6.9 million tonnes by the end of August.
The Viet Nam Coal and Mineral Industries Group (Vinacomin) said besides a coal consumption reduction in the domestic market, coal exports have also faced fierce competition from other countries as demand has slowed, resulting in sharp price declines. Global coal prices have fallen by 25-40 per cent so far this year, the company said, adding that its exports declined nearly 24 per cent in the first eight months of the year to 8.7 million tonnes.
Vinacomin cited the country's high export tax of 20 per cent as one of the reasons its coal has become less competitive than that from other countries.
The ministry expected that reducing the export tax on coal by 10 per cent would enable domestic coal producers to sell an additional 6.5 million tonnes this year.
Besides increasing export volumes, reducing inventories and safeguarding around 110,000 jobs in the mining industry, the tax cut would also help increase the State budget, the ministry said.
The tax cut follows the example of rival coal-producing countries, many of whom have reduced taxes to increase exports. Indonesia and Australia currently have no export tax. — VNS