City sees fuel import tax revenue down

The contraction is attributable to lower prices of fuel products in the period and the fact that domestic fuel trading firms have shifted to importing fuels from the markets where they can enjoy special tax incentives.

A representative of the HCMC Department of Customs told the Daily that all fuels imported into HCMC have come from those markets offering special tariffs as provided in the free trade agreements in the year to date.

Therefore, the Ministry of Finance’s recent decision to lower import tariffs for diesel, kerosene and jet fuel will not affect the city’s budget collection from fuel imports as firms can no longer import fuels subject to Most Favored Nation (MFN) duties, he said.

Besides fuel products, the city’s quarterly budget collections have plummeted by an additional VND3 trillion as duties on multiple products imported from the Republic of Korea and ASEAN countries have been cut to almost 0%. Certain fertilizer products, machines and equipment for agricultural production, offshore fishing boats, animal and poultry feed are exempt from value-added tax.

In all, HCM City encounters a budget shortfall of some VND5 trillion from imports and exports each quarter.

However, the city had collected export-import taxes of VND17.5 trillion by March 22, accounting for 17% of the full-year target. The representative of the customs department said the result was not bad owing to higher fee and tax revenues from many products.

He took completely built-up (CBU) autos as an example. Car imports into HCMC in the first three months have surged nearly 42% year-on-year to US$44 million.

The HCM City Department of Customs is assigned to collect VND102.5 trillion for the city’s budget this year compared to last year’s VND93.93 trillion.

With the target of VND102.5 trillion for this year, HCM City will contribute 37.96% of total tax and fee collections registered by the customs sector. The ratio was 35.7% last year.