MoF has proposed a reduction of tariff on a number of petrol products from 20 % to 10 %

The Ministry of Finance (MoF) has proposed a reduction of the most favored nation (MFN) tariff on a number of petrol products widely used in industrial production from 20 percent to 10 percent in an attempt to bring down the economy's input cost.


Source: The Edge


The Ministry of Finance (MoF) has proposed a reduction of the most favored nation (MFN) tariff on a number of petrol products widely used in industrial production from 20 percent to 10 percent in an attempt to bring down the economy's input cost.


In addition, the ministry said it will consider lowering the current tax on ethanol from 15 percent to 10 percent for some ethanol products.


There were six ethanol plants in Việt Nam with a total output capacity of 400,000 cubic meters while demand for ethanol, mostly used for the making of bio-gasoline E5 RON92, 5 percent of ethanol mixed with gasoline, which in the domestic market was estimated at 200,000 cubic meters a year.


In addition, higher input costs and an unstable supply of raw materials were Vietnamese ethanol makers' major weaknesses. It has resulted in some of them being forced to close down on top of their inability to compete with cheaper imported ethanol.


The US Grains Council has also recently filed a demand for Việt Nam to bring down tariffs on US ethanol from 15 percent to 5-10 percent.


According to the ministry, Việt Nam encourages the use of ethanol in making biofuel and the use of biofuel as they are considered to be more environmentally friendly compared to fossil fuels. In light of rising global prices, the country also aimed at greater imports of ethanol to help ease supply shortfalls.


The Southeast Asian country imported nearly US$49 million worth of ethanol last year with the US being its largest supplier with 62 percent of the volume. Under current regulations, ethanol (HS 2207.20.11, 2207.20.19) was set at a 15 percent MFN tariff.


The ministry said lowering MFN tariffs and tariffs on imported ethanol were effective steps taken to bring down petrol prices in Việt Nam and to help reduce the economy's input cost. In addition, the move has been said to provide a boost to exports, especially to the US.


Meanwhile, State budget collection might experience some minor decreases, according to the ministry.


Source: VNS