From 3pm on 11/5, the price per liter of E5RON 92 gasoline increased by 1,490 VND to 28,950 VND/liter, RON95 gasoline increased by 1,550 VND to 29,980 VND. This record high price is putting heavy pressure on the business community and people.
According to an economist, Dr. Nguyen Bich Lam, former Director of the General Statistics Office, petrol costs account for about 3.52% of the total production costs of the whole economy. According to calculations, a 10% increase in gasoline prices will reduce GDP by about 0.5% – a rather large reduction, reflecting the strong impact of gasoline price fluctuations on economic growth.
Besides that, economy The country is heavily dependent on imported raw materials from outside, with the proportion of cost of imported materials in the total cost of raw materials of the whole economy at 37%. When the world gasoline price increases, it will increase the price of imported and domestic raw materials.
In the context that the economy is in need of recovery after a period of stagnation because of the COVID-19 epidemic, if the price of gasoline increases, it will lead to an increase in the price index of all other industries, especially the transportation sector. logictisc…
Especially when gasoline prices continue to rise, it will reduce the effectiveness of the fiscal policies that are being implemented to stimulate consumption demand, stimulate growth and reduce inflation pressure, leading to failure to achieve the target of economic growth. growth, budget revenue loss but inflation still increased.
Economist, Assoc. Prof. Dr. Ngo Tri Long shared the same opinion when saying that petroleum is an essential commodity and an input for most production industries. Therefore, when the price of gasoline increases, it not only affects people directly consumption but also negatively affect production and business activities.
In the context that the economy is facing many difficulties because of the COVID-19 epidemic, purchasing power is still weak, this price increase will slow down the economic recovery process. The urgent issue now is to quickly restrain the increase in gasoline prices to prevent negative market fluctuations.
“The economy is entering the early stage of recovery, production and business activities have begun to resume. But too high gasoline prices will push input costs of goods, create a burden on business costs, hit people’s pockets, and slow down the recovery of the whole economy. Mr. Long said.
Should reduce more taxes
According to expert Ngo Tri Long, the current domestic gasoline price depends greatly on the world gasoline price and the adjustment of two “valves” is tax and the Price Stabilization Fund (BOG). In the context that the world gasoline price is continuously increasing, the BOG fund is exhausted, the cooling of gasoline prices only depends on the tax “valve”.
Currently, each liter of petrol sold on the market has to bear four types of taxes including value added tax of 10%, import tax of 10%, special consumption tax of 10% and environmental protection tax. But of these, the environmental protection tax has been reduced by 50% from 1/4. Import tax is already low, only excise tax can be reduced. However, Mr. Long acknowledged that tax reduction for petroleum products is difficult at present, because the revenue source is being severely affected. Tax collection on fuel products plays a huge role in budget revenue.
“The problem of reducing gasoline prices in the short term is too difficult, but in the long run, it is necessary to adjust and reduce the special consumption tax for petroleum products. The State will have to study very carefully and come up with appropriate solutions, both to restrain the increase in gasoline prices and to ensure revenue for the state budget.” Mr. Long emphasized.
Associate Professor Dinh Trong Thinh also said that special consumption tax should be balanced. Because this tax should only be levied on harmful goods and services, luxury goods while gasoline is an essential commodity. Moreover, petroleum is also subject to environmental protection tax.
According to Mr. Thinh, the reduction and exemption of taxes calculated on a percentage of the cost will ensure flexibility and the ability to affect macro factors of the economy. In case the revenue from taxes and fixed fees on petrol and oil prices is reduced due to new regulatory policies, it will be partially balanced by revenue from exported crude oil.
However, Mr. Thinh also noted that the gasoline price reduction needs to be carefully calculated because Vietnam’s gasoline and oil tax is lower than that of other countries in the region. If the price of gasoline is too low, it will lead to the development of smuggling. In fact, right in the last April – May, when the domestic gasoline price adjusted down, there were a number of cases of petrol smuggling detected on the southwest border.
From a business perspective, Mr. Do Van Bang, Vice Chairman of the Hanoi Transport Association, said that gasoline accounts for about 40-50% of transportation costs, so the increase in petrol prices puts great pressure on transport enterprises. load. In order to better support businesses in the current context, it is advisable to temporarily suspend the collection of environmental protection tax, when the business is healthy, then continue.
“The transportation industry faces too many challenges. Only adjusting taxes and petrol fees can lower gasoline prices, helping businesses reduce difficulties. Mr. Bang said and said it was possible.
According to Dr. Nguyen Bich Lam, in our country petroleum is one of the strategic commodities controlled by the state. The selling price is managed on the basis of ensuring the interests between the State, enterprises and people.
According to regulations, the Ministry of Industry and Trade captures gasoline prices on the world market, and coordinates with the Ministry of Finance to analyze price and tax factors to adjust taxes related to gasoline. Simultaneously, the two ministries and businesses identified, evaluated and coordinated smoothly to use the petroleum BOG fund.
“The Ministry of Industry and Trade, the Ministry of Finance, and businesses need to closely follow developments in the petroleum market, the world political situation affecting petroleum supply to have flexible solutions to cope with high oil prices in order to minimize negative impact on growth and inflation in 2022″, Mr. Lam said.
From April 1, the environmental tax will be reduced by 50% (equivalent to 2,000 VND) per liter of gasoline, but domestic gasoline prices are still high due to unpredictable fluctuations in world oil prices. Currently, the price of gasoline has approached 30,000 VND / liter, a record high so far.
In addition to “carrying” 4 taxes including 10% import tax, 10% special consumption tax, 10% VAT at the selling price and environmental protection tax of 2,000 VND/liter, each liter of gasoline must add business costs. norms, profit norms (300 VND/liter), level of setting up the stabilization fund (300 VND/liter) and profits of the enterprise.
The inter-ministerial ministry said it has also used the Price Stabilization Fund (BOG) in a flexible way, helping the domestic petroleum products increase lower than the world’s. But the difficulty is that BOG funds at enterprises are negative.
Mr. Tran Duy Dong, Director of the Domestic Market Department, Ministry of Industry and Trade, said that if gasoline prices continue to rise too high, a solution to reduce special consumption tax can be considered.
“I think that if gasoline prices continue to rise, then tax reduction solutions should continue to be considered. We still need to calculate longer, have more scenarios. For example, when gasoline prices fluctuate strongly. Moreover, the Ministry of Industry and Trade has made a scenario, if the price is 130 USD, 150 USD/barrel, it will propose a scenario to continue reducing taxes on gasoline, such as environmental tax, excise tax, VAT, supply diversification…”, Mr. Dong said
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