Environment Tax Law: Too Much Concentration on Tax Collection

The Environment Tax Law is considered to be an economic tool in environment management, polluters fundamentally must pay for their waste, and it is applied for two main reasons: establishing a source to increase budget revenue and to encourage behaviour more beneficial for the environment. Depending on situations and purposes in each country, this tool will be designed to be feasible for the first or the second target.

 

According to Mr Pham Van Khanh, Vice Director of Ha Noi Natural Resources and Environment Department, the situation of production pollution has shown several inadequacies in implementation and application of environment protection policies in Vietnam, regulations on environment fees have just collected partial contribution of polluters, supporting a clean environment. In related taxes such as: excise tax, corporate income tax, import - export tax, environment protection aim is just integrated. The promulgation of Environment Tax Law will satisfy the purposes of sustainable development, encourage to economy development linked with diminishing environment pollution; and raise people’s awareness of environment protection.

 

When Environment Tax Law is put in practice, product groups which harm human health, including plastic bags and flora protection drugs belonging to the restricted group, have to be taxed with environmental fees. As a result, the Environment Tax Law encourages environmentally sensitive production and raises budget revenue. Furthermore, it has also encouraged creativeness, solutions, competitive strength, trust and safety, as well as created chances for producers and consumers to together find better methods to reduce environmental pollution.

 

The group of taxed products, including petroleum, oil and coal, is mostly input sources, not products; so the tax has increased costs, so the economy will be strongly influenced. In connection with the norm of environment tax in other countries, Vietnam’s is still low, but revenue differences between Vietnam and other countries must be considered.

 

In the conference of “Critical opinions on the draft of Environment Tax Law”, Ass.Prof, Dr Nguyen Dinh Hoe, Chairman of Vietnam Association for Conservation of Nature and Environment Protection, expected that the minimum revenue will amount to VND14,300 billion per year, and the maximum will account for VND57,000 billion per year under current tax norms.

 

Meanwhile, Vietnam is striving to decrease the poverty rate to 20 percent (about 17 million people). So does the environment tax law influence on life of the community?

People are also concerned about the number of taxes: there are many products that are under too many types of tax. For example, coal is currently under resources tax, exploit tax, VAT, exhaust gas fee and, in the near future, environment tax. When products are under more taxes, producers will raise prices and eventually consumers pay the price. Therefore environment tax concentrates too much on tax collection, and will burden the poor instead of the polluters.

 

Environment protection laws will go into effect from January 1^st, 2012. Hopefully it is will be powerful enough to restrain products harmful to the environment, as well as realise the target: people who cause much more pollution must pay higher fees.