HA NOI (VNS)—The Ministry of Finance is considering a more exact way of changing its method of calculating import taxes on gasoline and oil.
|A Petrolimex petrol dealer in Ha Noi. The Ministry of Finance is considering a more precise way of calculating import taxes on petrol and oil. — VNA/VNS Photo Minh Tu
This would mean basing calculating petrol and oil import taxes on the average price of every specific commodity for 30 days following Platts Singapore's information instead of the present system of using WTI prices.
Platts Singapore refers to the mean price of oil trade through Singapore as per the data from Platts, a commodity information and trading company; while WTI refers to West Texas Intermediate crude-oil prices.
The ministry made the suggestion after consulting ministries and key enterprises about a more realistic and detailed import tariff that is closer to developments on the global petrol market.
The ministry said that after using the WTI system to calculate import duty for the last two years, it provided inexact results. Occasionally, the fluctuation of WTI crude-oil prices wasn't directly proportional to the development of prices for gasoline, kerosene, diesel and mazut oil.
Based on the 30-day Platts Singapore measure, it suggested that gasoline that had an average price of US$70 per barrel and below should be subjected to a maximum import tax of 40 per cent; from $70-90 subjected to a maximum of 30 per cent; from $90-110, subject to a maximum 20 per cent - and from $110-130 to a maximum of 12 per cent. Above $130 per barrell, the tax would be a low 7 per cent.
Import duties for kerosene, diesel and mazut oil would be a maximum of 40 per cent if average prices were below $75 per barrel; and 7 per cent if prices averaged $135 per barrel or higher.
This is different from the current petrol import tariff, which only stipulates taxes for prices ranging from $45 to $95 per barrel and is often adjusted by the ministry when prices are out of this range.
The ministry said the new tax calculating way would help the country assure tax revenues, at the same time maintain reasonable after-tax prices compared to regional levels, which would restrict petrol smuggling. — VNS