Problems facing oil refinery ease after Ministry of Finance adjusts tax regime.
The risk of the Dung Quat Oil Refinery in central Quang Ngai province having to close because of overly-high inventories has been resolved after import taxes on petrol were cut sharply on April 14, a leader from the Binh Son Refining and Petrochemical Co. (BSR) said.
Despite being in Vietnam, Dung Quat had previously been subject to a general import tax that was higher than that imposed on petroleum products from ASEAN countries. BSR filed a written report with the Ministry of Industry and Trade, the Ministry of Finance, and the Quang Ngai Department of Taxation concerning the difficulties it was encountering with the tax regime.
Petrol and jet fuel from all markets are now imposed with the same import tax rate. DO is the only product where rates differ, at only 5 per cent from ASEAN countries and 20 per cent from other markets, including Dung Quat. “If the tax on DO remains at this rate the plant will cut its DO production and concentrate on other products such as petrol and diesel,” the BSR leader said.
Petroleum products imported from ASEAN countries are to enjoy preferential tariffs under free trade agreements. The flat rate of import tax on petrol from all markets, including Dung Quat, is now 20 per cent while jet fuel is subject to 10 per cent and diesel 5 per cent.
Production at the Dung Quat Oil Refinery has reached 6.5 million tons per year, accounting for 30 per cent of Vietnam's annual output.
- Dung Quat
- Binh Son