Speaking with SGGP about the Environmental Tax Bill drafted by the Finance Ministry, he said under the taxation method in the bill, “consumers will ultimately have to pay the tax when they buy those products.

“This is unreasonable, since it is producers of such products that must be the taxpayers,” Dr. Tuan said.

The bill, which will be passed by the National Assembly this year and take effect in 2012, levies an environment tax on oil, petrol, coal and substances containing hydro-chlorofluorocarbons (HCFC's), plastic bags, and plant protection substances.

Under the bill, the tax rate on petrol will be VND1,000-4,000 per liter; on diesel, VND500-2,000 per liter; coal, VND6,000-30,000 per ton; plastic bags, VND20,000-30,000 per kilogram; and plant protection substances, VND1,000-5,000 per kilogram, he said.

One important principle of environment tax collection is that polluters must pay the tax, he explained.    

“In addition, those tax rates are unreasonable, since the environment tax is supposed to be levied on products that can be harmful to the environment and human health, so they must be calculated based on the volume of pollutants discharged into the environment, the level of toxicity of pollutants and their impacts on the environment and humans,” he said.

For instance, according to the bill, petrol, in which the content of sulfur is nearly zero, is taxed higher than mazut, in which sulfur accounts for 3 percent. It is irrational, he said.

Asked if only the five products mentioned above should be subject to the tax, Tuan said the Finance Ministry should consult other relevant agencies, especially the Ministry of Natural Resources and Environment, on this issue.

He argued that there are numerous waste discharged by industrial activities, including thousands of toxic chemicals such as PCB, COD, BOD, chrome, lead, nitrogen, carbon dioxide, methane, and sulfur dioxide.

Currently, provincial and municipal departments of natural resources and environment are imposing fees on industrial wastewater, which is an environmental protection fee. Accordingly, businesses must pay fees based on the composition of the waste they produce and the volume of such waste discharged into the environment.

“This method of fee collection is really reasonable, and it can be applied in the bill on environment tax and can bring good results,” he said.

The collection of environmental protection fees over the past five years has not met expectations only because so many businesses have ignored it. They were able to do so because there were no effective sanctions against them, he said.

Therefore, when such a fee is transformed into a tax under the bill, the situation can be improved a lot, since businesses that evade the tax may face criminal charges, he said.

 
For example, thousands of enterprises in Ho Chi Minh City and the provinces of Binh Duong and Dong Nai have not paid the fee since 2004, Tuan said.