Proposing to increase export tax to reduce domestic fertilizer prices

The Ministry of Finance said that it has just completed the Draft Decree on Schedule export taxPreferential import tariff, List of goods and absolute tax rates, mixed tax, import tax outside the tariff quota.

The Ministry of Finance said that recently, this agency has received recommendations from many agencies to review and consider export tax policies with fertilizers in the context of high fertilizer prices.

The Ministry of Finance has reported to the Government on an overview of the fertilizer market. Accordingly, the prices of fertilizers in the world and domestic markets continuously increased because most of the raw materials had to be imported and prices increased sharply in recent times. In addition, the scarcity of empty containers and the lack of raw materials for production (such as the lack of apatite ore selected for the production of NPK fertilizers) caused fertilizer prices to rise.

Currently, the total fertilizer production capacity in the country reaches 29.25 million tons (including inorganic and organic). If fertilizer factories operate smoothly according to their designed capacity, they can meet the domestic demand for nitrogenous and phosphate fertilizers. Particularly for potash fertilizers, because there is no potassium salt mine, they have to rely on imports.

According to the provisions of the Law on Export Tax, import tax, fertilizer with the value of natural resources and minerals plus energy costs is less than 51% of the product cost with the export tax rate of 0%. For fertilizers with a value of mineral resources plus energy costs accounting for 51% of the product cost or more, the export tax rate is 5%.

“In order to contribute to lowering the domestic fertilizer price and stabilizing the supply, the Ministry of Finance submitted to the Government for uniform regulations on the 5% export tax rate for fertilizers, regardless of the percentage of mineral resources in the fertilizer. fertilizer. Accordingly, fertilizers with the value of natural resources and minerals plus energy costs below 51% of the product cost will have the export tax rate increased from 0% to 5%. Other groups of fertilizers will keep the current tax rate, “said the Ministry of Finance.

According to the Ministry of Finance, this plan to increase export tax will contribute to retaining the source of fertilizers for domestic use, especially in the context of high fertilizer prices, ensuring the harmony of interests between the state and businesses. At the same time, it will reduce administrative procedures because businesses and customs must determine the proportion of mineral resources in products as current regulations, and unify export taxes with enterprises. However, this will affect fertilizer exporters.

The Ministry of Finance also proposes to reduce the preferential import tax (MFN tax) on unleaded and motor gasoline from the current 20% to 12%. The reduction of MFN tax will contribute to diversifying petroleum supplies from other countries such as China, the US and countries in the Middle East, avoiding too much dependence on a few partners like now in the case of Supply in the world market fluctuates.