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Promulgating severance tax-liable price frame

Summary

Updated on : 04-07-2017

VCN - Severance tax-liable price frame for resource groups and categories of similar physiological and chemical properties promulgated by the Ministry of Finance will come into effect from July 1, 2017. This price frame is expected to overcome the current inconsistency of applying the tax-liable prices between localities. 

Implementing the Law on Severance Tax No. 45/2009 / QH12 dated November 25, 2009 for resources to be controlled when calculating severance tax, especially resource groups and categories of similar physical and chemical properties, but localities apply different severance tax-liable prices, creating unequal competition environment, even causing budgetary loss and inefficient use of natural resources. Decree No. 12/2015 / ND -CP guiding the implementation of the Law amending and supplementing some articles of Laws on Tax which were assigned to the Ministry of Finance to preside over and collaborate with relevant agencies to stipulate the severance tax-liable price frame for resource groups and categories of similar physical and chemical properties.

On May 12, 2015, the Ministry of Finance issued Circular No. 44/2017/TT-BTC prescribing the severance tax-liable price frame for resource groups or categories of similar physical and chemical properties. The Circular stipulates the severance tax-liable price frame for metallic minerals; non-metallic minerals; natural forest products; natural aquatic resources; natural water (excluding natural water used for hydropower generation) and Natural swallow's nests.

Basing on the severance tax-liable price frame, the provincial– level People’s Committees issue a List of severance tax-liable prices. The severance tax-liable prices in the List must be consistent with the severance tax-liable price frame and higher than or equal to minimum prices of relevant groups and categories in the severance tax-liable price frame.

The Circular mentions 2 cases to be amended and supplemented the severance tax-liable price frame. The first is when the prices of common resources on the market has a significant fluctuation with an increase from 20% or more compared with the maximum prices or a decrease from 20% or more compared to the minimum prices in the severance tax-liable price frame of the Ministry of Finance. The second is when new natural resources are not defined in the severance tax-liable price frame

Mr. Nguyen Huu Tan – Nguyen Huu Tan, Deputy Director of the Tax Policy Department under the General Department of Taxation also added that the Circular also stipulates information source to form the databases for severance tax prices and responsibility of the General Department of Taxation in building and updating the severance tax bases. The severance tax-liable price frame and severance tax price databases are to establish the severance tax-liable price list to serve the unified management of severance tax-liable prices over the country and risk management in severance tax collection management and severance tax management and inspection; thereby encouraging effective exploitation and use of the country’s resources.

He also said that the promulgation of this price frame as well as the databases will help localities get full information and bases to set a specific and reasonable price list in order to avoid unfair competition among neighboring provinces. In addition, this severance tax-liable price frame does not affect incentives for aquaculture and fisheries under the Government's Decree 67 / ND-CP on fisheries development policies, which regulates that natural aquatic resources are not subject to tax

By Hong Van/ Huyen Trang