What is Severance Tax used for?

 VCN- The revenue from Severance Tax is not used for environmental protection, but for paying to the State budget. In fact, the statistics shows that the expenditure for environmental protection is always higher than the revenue.
what is severance tax used for Revenue from Severance Tax accounted for only 1.36% - 4.27% of total State revenue
what is severance tax used for Leader of Ministry of Finance explains about the Bill amending 5 Tax laws
what is severance tax used for Receiving consultations on Law amending of 5 laws on tax until 29/8 /2017
what is severance tax used for

Many environmental protection activities used funds from State budget. Photo: Internet.

The Law on State Budget provides that revenue from tax, fees, charges and other revenue in accordance with the law is fully summarized to the State budget balance under the principle of not attaching to specific expenditure tasks.

According to Ministry of Finance, the total State expenditure for environmental protection task for 2012-2016 (including loans, aids that were included in the State budget for recurrent expenditure for environmental protection or development investment; excluding expenditure for economic activities, development investment expenditure, reserve expenditure of local budget for environmental protection task and loans, aids for projects on environmental protection was not included in the State budget) was about VND 131,857 billion, averaging about VND 26,371 billion per year and was higher than revenue from Severance Tax for 2012-2016.

Of which, total recurrent expenditure for environmental protection was about VND 89,131 billion, including recurrent expenditure from the State budget (Central budget and local budget) for environmental protection (not exceeding 1% of total State expenditure) of VND 52,420 billion. Expenditure for economic activities from the Central budget (including expenditure for projects on survey, assessment of land, geology, water resources, sea and islands, etc., shall be estimated in the annual State budget expenditure of Ministry of Natural Resources and Environment; Expenditure for National Target Program to Respond to Climate Change (2012-2016), National Target Program for Energy Efficiency and Conservation (2012-2016), Target Program for Sustainable Forestry Development (2016). Expenditure for implementation of policies on management of land use for rice cultivation, forest development, management of natural forest exploitation, support for fishery exploitation and production, maintenance of dykes, agricultural extension and public irrigation was about VND 36,711 billion.

Total expenditures for development investment of the central budget expenditures for projects, programs managed by sector, focusing on 2 sectors: Natural Resource and Environment sector, Water Supply and Sewage treatment sector, and expenditure for many programs such as Rural Water Supply and Sanitation Program, Environmental pollution prevention and remediation program; Program to Respond to Climate Change, was about VND 24,246 billion.

Total expenditures from the central budget reserve for natural disaster prevention and control and support to localities to handle urgent tasks in the year, such as for dykes and reservoirs, etc., for 2012 - 2016 was about VND 18,480 billion.

In addition, there are also a number of contents and tasks funded by the State budget in order to contribute to protection, such as for science and technology projects and programs of green and sustainable technology applications.

Accordingly, the compliance with Severance Tax policies has contributed to encouragement of social contribution and increased the State revenue to handle increasingly demanding environmental issues.

what is severance tax used for Promulgating severance tax-liable price frame

VCN - Severance tax-liable price frame for resource groups and categories of similar physiological and chemical properties ...

With the role as an economic tool, Severance Tax showed the direction and adjustment of the State for consumption of some products and goods causing environmental pollution. After over 5 years of implementation, Severance Tax policies have basically met requirements and contributed to achieving the goal of sustainable economic development and minimizing negative impacts on the ecological environment in accordance with the world’s development trend.

In fact, the expenditure for environmental protection task from the State budget increased gradually in 2012-2016. The total State expenditure for this task in this period was about VND 131,857 billion, (average about VND 26,371 billion per year), and was higher than revenue from Severance Tax (about VND 105,985 billion, average VND 21,197 billion per year).

By Hong Van/Ngoc Loan

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