The eight categories of products include petroleum products, coal, HCFC
solutions, plastic bags, herbicide, pesticide act, forest products
preservatives, warehouse antiseptics which listed as the products for “limited
use”.



According to Nguyen Thi Cuc, former Deputy General Director of the Vietnam
Department of Taxation, now Chair of the Vietnam Tax Consultancy Association
VTCA, a member of the environmental tax compilation committee, the “products for
limited use” could be understood as the most toxic and easy to control.
Meanwhile, in fact, many other products potentially harmful to the environment
still have not been put into the taxation list.



However, the environmental protection law allows the National Assembly’s
Standing Committee to add taxation items after considering the real situation.
This means that the number of items to be imposed the environment tax will
increase.



Now or too late



It is understandable that the environment tax has not been applauded by
people. Even in developed countries, this kind of tax also does not get support
from the public.



According to the Ministry of Finance, in 2010, Vietnam collected 10,500
billion dong in fuel fee through petroleum product sale, while the figure is
expected to reach 12 trillion dong in 2012. The maximum fuel fee is 1000 dong
per liter of petroleum products sold. Meanwhile, in the environment tax, the
collection level would be 4000 dong, which means that the petroleum prices will
increase.



A lot of experts have warned that the petroleum price increases would
burden people and make the inflation more serious. They say that no developing
country, including China, imposes environment tax on petroleum products. Japan,
a developed economy, has also decided to halt the collection of environment tax
in the fiscal year commencing from April 2010.



However, Cuc and environment tax compilers do not think this way. She said
that the environment taxation aims to raise the awareness of restricting the use
of substances and goods that badly influence the environment. Besides, the
taxation will force people to think carefully before purchasing goods and
encourage them to use alternative non-toxic products.



For example, since the petroleum prices increase, people would think of
using public means of transport instead of private vehicles.



“In some other countries, people have to buy oxygen to breath in the
polluted environment. Vietnam may face the same problem if it does not soon
apply the environment tax law,” Cuc has warned.



Transparency is the key



Chas Roychowdhury, Tax Director of the Association of Chartered Certified
Accountants (ACCA), also said that in the context of economic difficulties, it
is really difficult to persuade people to pay money on a new type of tax.
Therefore, it is necessary to make people understand that the taxation is not
the way the government uses to collect more taxes, and to show people what the
government will do with the money to be collected.



He emphasized that the confidence of the public always plays a very
important role in the successful implementation of tax policies. The government
and policy makers need to harmonize the purpose of increasing the tax collection
and the purpose of protecting the environment in designing the tax policies.



He has also warned that this may happen that the manufacturers would leave
the countries which apply strict environment tax policies for the countries
which impose lower taxes. Therefore, he said, the international cooperation is
very necessary in the implementation of the environment tax law.



It is expected that Vietnam will collects 57 trillion dong a year in
environment tax, which means that every person at the working age has to pay a
million dong a year.



C. V