HA NOI (VNS) — The Ministry of Finance has put on hold a proposal for further cuts to import duties on petroleum products from Dung Quat Oil Refinery, a local newspaper reported.
Deputy Minister of Finance Vu Thi Mai told the press on September 1 that the current tax rates would continue to ensure maintaining the refinery's production, as well as petrol and oil imports and exports.
Her statement was in response to the proposal by PetroVietnam and Binh Son Refining and PetroChemical Company Ltd, which operates Dung Quat Oil Refinery, about further cuts on import duties for Dung Quat Refinery, which were expected to prevent the refinery from incurring losses.
Mai said that the finance ministry would join with the Ministry of Industry and Trade to closely watch oil market fluctuations, especially evaluating their negative impacts, if there were any, that import duties caused on the sale of the refinery's products.
Mai noted that the import duties on petroleum products were already cut, in line with commitments to sign free trade agreements, especially the ASEAN Trade in Goods Agreement (ATIGA), amid plunging world oil prices.
As of the middle of April, following concerns about the possible closure of Dung Quat Oil Refinery because its products could not compete with imported goods, the finance ministry cut import tariffs imposed on petrol from 35 to 20 per cent and diesel from 30 to 20 per cent.
Still, the refinery's operator expected further import duty cuts, given the dependence of its business on the enjoyment of preferential taxes.
It was estimated that Dung Quat Oil Refinery would have a total loss of VND27.6 trillion (US$1.226 billion) in the 2009-14 period.
The refinery is currently provided with several preferential tax policies, including an exemption of corporate income tax (CIT) in the first four years since reporting taxable income, CIT of 10 per cent in 30 years and reduction of 50 per cent in the nine following years. — VNS