Vietnam News Brief: Environmental Tax, Sports Restrictions, and Korean Imports
Environment tax on fuel causes concern for businesses
The Ministry of Finance (MoF) has proposed to impose an environmental protection tax on fuel. The draft law would see almost tripling of the tax.
The ministry has proposed:
- Tax of US$0.17-0.35 (VND 4,000-8,000) per liter of gasoline, compared to the current US$0.04-0.17 (VND 1,000-4,000).
- Tax of US$0.13-0.26 (VND 3,000-6,000) per liter of jet fuel.
- Tax of US$0.06-0.35 (VND 1,500-4,000) per liter of diesel.
- Tax of US$0.13-0.08 (VND 3000-2,000) per liter of kerosene.
- Tax of US$0.04-0.17 (VND 900-4,000) per kg of heavy fuel oil.
- Tax of US$0.04-0.17 (VND 900-4,000) per kg of lubricant.
While the tax rates are tentative, the specific rates will be decided by the National Assembly. The Vietnam Chamber of Commerce and Industry (VCCI) has argued that the proposed tax rates would hurt businesses and the economy as fuel is important for transport, agriculture and seafood sectors. Sources say that fuel makes up around 25-45 percent of costs in vehicles and around 39.5 percent in airlines. The Ministry of Justice also asked the MoF to consider the proposal as it would directly affect businesses. This was followed up by the Ministry of Foreign Affairs asking if the proposed changes were necessary.
Ban on sports betting to be lifted from March 31
Vietnam’s government on February 3 released Decree 06 which legalizes betting on football, horse and dog betting. The new regulations will take effect on March 31 and will allow Vietnamese citizens 21 years and over from participating in gambling with a minimum bet value of US$0.45 cents and maximum value of US$44 per day. Vietnam has around 30 casinos but locals are barred from gambling unless they have a foreign passport.
As per the regulation, only one company will be allowed football betting service for a period of five years after which the government will review its performance before renewing its license. Only international football games recognized by international football governing body FIFA and the Ministry of Culture, Sports and Tourism will be allowed in betting. Companies wanting to enter the market will have to have a capital of US$45.1 million for football and horse races and US$13.63 million for dog races.
Korean import regulations eased
Vietnam’s Ministry of Trade, Industry and Energy has eased imports of Korean home electronics and appliances such as air conditions and rice cookers. The ministry has relaxed rules on 16 appliances and electronics acquiring energy efficiency tests and certifications. As per the current rules the Vietnamese government requires Korean manufactures to renew energy efficiency tests every six months from government-run agencies but now local manufacturers can submit the test results approved from those taken by the Korean government.
Typically it costs around US$2,700 to US$3,300 to completely energy efficiency tests in Vietnam and another US$2,700-3,300 to get a certification for six months. Local manufacturers now will be able to save the US$3,000 costs. It also takes around 10 weeks for Korean makers to receive certifications but the Korean Trade Ministry expected this process to reduce significantly. The development comes after the Korean authorities asked the Vietnamese authorities in September 2016 to ease some regulations.
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