Proposing reducing ethanol import tax to cut price of biofuel

VCN- While collecting comments on the amendment to the preferential import tariffs, the Ministry of Finance said some foreign units proposed reducing the import tax on ethanol items under the HS codes 2207.20.11 and 2207.20.19. The Ministry of Finance is considering the proposals. 
proposing reducing ethanol import tax to cut price of biofuel Bio-fuel consumption increases 31.8%
proposing reducing ethanol import tax to cut price of biofuel
For consumers to use mineral petrol, the difference level must be at least VND 2,000/ litre. Photo: Internet.

Under current preferential import tariffs, ethanol is classified into two sub-headings. The first sub-heading is undenatured alcohol with alcohol content of 80 percent or more (HS code 2207.10.00) has the MFN tariff rate of 40 percent, equal to the WTO commitment. The import turnover in 2018 reached US$1 million, of which imports from the US accounted for $254.

The second sub-heading for ethyl alcohol and denatured alcohol at all concentrations has the MFN tariff rate of 17 percent for HS code 2207.20.11; 20 percent for HS code 2207.20.19; and 40 percent for the HS code 2207.20.90. This ethyl alcohol is used in industry. The import turnover in 2018 was $31 million, of which imports from the US reached $17 million (accounting for 54 percent), South Korea of $13 million (accounting for 41 percent) and mainly of HS code 2207.20.19.

According to the Ministry of Finance, previously, this sub-heading had the MFN tariff rate of 20 percent but in fact domestic ethanol factories were unable to provide enough ethanol to mix E5 gasoline in 2018 and lackedE10 gasoline since January 1, 2019, the Ministry of Finance has reduced the tax rate from 20 percent to 17 percent.

The special preferential tax rate under the ATIGA and Vietnam-Korea Agreement for the heading 22.07 is 0 percent.

Regarding domestic production, to ensure energy security, protect the environment and raise incomes for farmers, the Government has issued policies for the development of bio-fuels and the promotion of benefits of bio-materials under Decision 177/2007/QĐ-TTg approving the “scheme for bio-materials development by 2015 with a vision to 2025”.

Based on this scheme, Vietnam has six factories producing ethanol for biofuel blending. To now, most factories have stopped operating due to losses and only Tung Lam Co., Ltd’s ethanol factory is operating.

The demand for using ethanol to make E5 RON92 gasoline in Vietnam is about 200,000m3/year. Ethanol production capacity in Vietnam reaches 400,000m3/year. Thus, design capacity of domestic factories can meet domestic demand, however, ethanol needs to be imported as factories have stopped operation.

For consumers to use mineral petrol, the difference level must be at least VND 2,000/ litre. With this difference, the import tax reduction of 5 percent is not significant and it is not enough for consumers to use biofuel.At the end of October 2019, the Ministry of Finance held a meeting with ministries, sectors, associations, the Vietnam National Petroleum Corporation, and the Vietnam Oil and Gas Group. According to ministries, sectors and business associations, the price of biofuel is currently lower than mineral petrol at 1,325 VND/ litre.

proposing reducing ethanol import tax to cut price of biofuel Environmental protection tax for biofuel must comply with the principles of taxes

VCN- Facing to the proposal for more preferential environmental protection tax (EPT) rates to promote the use ...

However, depending on the goals, the Ministry of Finance will select the appropriate plan. The Vietnam Oil and Gas Group said the import tax reduction is good for businesses but overall does not have much impact on price reduction and affects biofuel producers.

Based on the opinions of the ministries, sectors and associations and to balance the trade balance with the US, the Ministry of Finance has proposed the Government reduce the tax rate on ethanol for HS code 2207.20.11 from 17 percent to 15 percent and for HS code 2207.20.19 from 20 percent to 15 percent.

This proposal was provided by the drafting agency based on the draft Decree No.125/2017/ND-CP of the Government amending and supplementing a number of articles of Decree No. 122/2016/ND-CP dated September 1, 2016 on the Preferential Import and Export Tariff, the list of goods and the absolute tax, compound tax, and import tax outside the tariff quota.

By Hong Van/ Ngoc Loan

Related News

More export opportunities from the Chinese market

More export opportunities from the Chinese market

VCN – Besides 12 fruit and vegetable items; bird's nest, fish meal and some products for the production and processing of animal feed, dairy and seafood products that have been officially exported to China, fresh coconuts, frozen durian, crocodiles, poultry... are expected be officially exported to the Chinese market in the near future.

Latest News

Quảng Ninh posts fourth fastest growth in Red River Delta

Quảng Ninh posts fourth fastest growth in Red River Delta

The gross regional domestic product (GRDP) in the northern province of Quảng Ninh expanded at an estimated 9.02% year on year during the first half of 2024, ranking fourth in the Red River Delta and eighth nationwide.
New decree to set stage for innovative start-up economy

New decree to set stage for innovative start-up economy

The development of a separate decree on innovation and innovative start-ups is underway with an aim to leverage innovative start-up firms to a new height.
Early US recognition of market economy to increase opportunities for Vietnamese exports

Early US recognition of market economy to increase opportunities for Vietnamese exports

The US's recognition of the market economy in Vietnam will help expand business opportunities for Vietnamese enterprises and pave the way for Vietnamese exports to this market, according to experts.
Industrial production grew on a large scale

Industrial production grew on a large scale

VCN - 55 localities had an increase in the index of industrial production (IIP) compared to the same period last year, only 8 localities had a decrease in IIP compared to the same period last year.

More News

Việt Nam

Việt Nam's cinnamon exports hits over $96.3 million in five months

Farmers have been continuously working on new techniques to improve the quality and productivity of cinnamon trees.
Việt Nam facilitates the establishment of free trade zones

Việt Nam facilitates the establishment of free trade zones

Earlier, the State has proposed allowing Đà Nẵng City to pilot the establishment of a Đà Nẵng Free Trade Zone connected to the Liên Chiều Seaport. The goal is to implement experimental policies and mechanisms to attract investment to the area.
Digital technology promotes green transformation at businesses

Digital technology promotes green transformation at businesses

VCN - Under pressure from the market, green and digital transformation are placing considerable pressure on businesses. This is also a hot topic discussed and analyzed at the International Forum on Creative Business - IIBF 2024, which just opened on the morning of June 12 in Ho Chi Minh City.
Vietnam’s fishery export likely to reach 4.4 billion USD in H1

Vietnam’s fishery export likely to reach 4.4 billion USD in H1

Vietnam’s export of fishery products is expected to reach 4.4 billion USD during January-June, a year-on-year increase of 6%, despite such formidable challenges as extreme weather conditions and competitive pressure regarding export prices, high input costs and shortage of materials, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Shifts in investment flows for export-oriented industries

Shifts in investment flows for export-oriented industries

The country's textile, garment and footwear industries have long relied on imported raw materials, causing a current trend of foreign enterprises shifting industries to other countries, said insiders.
Intensive processing enhances spice export value: insiders

Intensive processing enhances spice export value: insiders

A world leading spice exporter with a revenue of some 1.5 billion USD every year, Vietnam should bolster intensive processing and trade promotion to increase added values, experts have said.
Supporting industries needs a push to grow: Insiders

Supporting industries needs a push to grow: Insiders

As the development of supporting industries of Vietnam has yet to match their potential, the sector needs a push to clinch a position in the domestic market and rise to the world, according to insiders.
Greening creates competitive and sustainable advantages for enterprises

Greening creates competitive and sustainable advantages for enterprises

VCN - The gradual greening of production, green factories, green technology, clean materials, green energy, etc., has become an inevitable trend and creates competitive and sustainable advantages for enterprises in the face of difficulties and challenges.
Number of newly-established firms in five months highest on record

Number of newly-established firms in five months highest on record

As many as 64,758 enterprises entered the market in the first five months of this year, marking the highest number ever recorded, and a 4.5% increase from the same time last year, according to the Ministry of Planning and Investment (MPI)’s Business Registration Management Agency. ​
Read More

Your care

Latest Most read
Quảng Ninh posts fourth fastest growth in Red River Delta

Quảng Ninh posts fourth fastest growth in Red River Delta

The gross regional domestic product (GRDP) in the northern province of Quảng Ninh expanded at an estimated 9.02% year on year during the first half of 2024, ranking fourth in the Red River Delta and eighth nationwide.
New decree to set stage for innovative start-up economy

New decree to set stage for innovative start-up economy

The development of a separate decree on innovation and innovative start-ups is underway with an aim to leverage innovative start-up firms to a new height.
Early US recognition of market economy to increase opportunities for Vietnamese exports

Early US recognition of market economy to increase opportunities for Vietnamese exports

The US's recognition of the market economy in Vietnam will help expand business opportunities for Vietnamese enterprises and pave the way for Vietnamese exports to this market, according to experts.
Industrial production grew on a large scale

Industrial production grew on a large scale

VCN - Assessing the industrial production situation in the first five months of the year, the Ministry of Industry and Trade said that IIP is estimated to increase by 6.8 percent compared to the same period last year (the same period in 2023 decreased by
More export opportunities from the Chinese market

More export opportunities from the Chinese market

VCN - Notably, at a recent meeting between representatives of the Ministry of Agriculture and Rural Development (Vietnam) and the General Administration of Customs China (GACC), the two sides agreed on cooperation in trade and opening the market for agric
Mobile Version