The General Department of Taxation recently reported its plan for separation of environmental protection tax sources based on the new Law on State Budget to the Ministry of Finance.
2017 is the first year of the stability period of the State Budget (2017-2020) and implementation of the Law on State Budget of 2015, according to the General Department of Taxation. Thus, environmental protection tax on imported gasoline and oil will be paid 100 per cent to the central budget.
As for environmental protection tax on domestically produced petroleum, the value imposed will be determined on the output general selling agents sell on the market and the ratio of domestically produced to imported petroleum.
From July 2017 when the Nghi Son oil refinery goes into operation and has commercial products, the ratio of domestic side will increase. Specifically, this ratio will climb to 53 per cent in 2017 and to 91 per cent in 2019.
According to the General Department of Taxation, the takings from environmental protect tax on imported petroleum will reach VND27,400 billion in 2017.
Some other oil refineries are projected to enter operation from 2019 like Nam Van Phong petrochemical complex in Khanh Hoa province, Long Son oil refinery and facilities in Ba Ria - Vung Tau province and existing facilities like Dung Quat and Nghi Son refineries are expanded, the domestic output will surpass the demand. At that time, the ratio of domestically produced petroleum will account for 100 per cent.
Therefore, the Central Budget's takings from environmental protection tax will diminish from 100 per cent. And, after 2019, the Central Budget will not take 100 per cent of environmental protection duties.
Since the operational progress of domestic oil refineries affect domestic output and import volume, the structure of imported petroleum and domestic one is thus volatile.
The General Department of Taxation said, if the policy is not changed until the end of this year, the reality-based distribution ratio will not catch up with the change, thus resulting in big changes in central and local budgets at the end of the year.
For that reason, the General Department proposed imposing new distribution rate for provisional allocation and adjusting environmental protection tax every six months.
The General Department also suggested using the rate of imported petroleum in the preceding period for determination. It will notify tax authorities and the State Treasury of the provisional ratio of imported petroleum.
When petroleum companies pay environmental protection tax on the monthly basis, the tax will be accounted into the provisional account opened at the State Treasury in localities where the environmental protection tax arises. The tax will be transferred to the Exchange of the State Treasury in the next date at the latest.
Based on the ratio of imported petroleum reported by the General Department of Taxation, the Exchange shall take the money from the provisional account and make an entry into the beneficiary account of the central budget.
After the six-month period ends, the General Department of Taxation will notify the ratio of imported petroleum in the current period, based on the previous period data, to the State Treasury and provincial/municipal tax authorities, at most 15 days from the ending date of the past period.
PV
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