Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you.
- MoIT drafts mechanism to adjust average retail power price
- Special consumption taxes on gasoline to stay in place: MoF
- UNDP project to help Việt Nam further corruption fight
- Gasoline tax cut not on National Assembly agenda this time
Find more details as below:
- MoIT drafts mechanism to adjust average retail power price
Some highlines are as below:
- The Ministry of Industry and Trade (MoIT) is drafting a prime minister’s Decision on the mechanism for adjusting the average retail electricity price.
- Under the draft, when the input parameters fluctuate, causing the average retail price of electricity to decrease compared to the current average retail price, Vietnam Electricity (EVN) is responsible for reducing the average retail price of electricity at the corresponding rate, but not lower than the minimum price of the price bracket. It would also reduce the retail price of electricity for each group of electricity users in accordance with current regulations on the structure of the electricity retail tariff.
- After the adjustment, it is responsible for making a report to the MoIT, MoF and SCIC for inspection.
- Since early this year, electricity tariffs have been facing upward pressure when input costs have skyrocketed. For example, the average price of anthracite supplied by Vietnam National Coal-Mineral Industries Holding Corp. (Vinacomin) increased by 63 per cent. The price of imported coal doubled, to $305 per tonne while that of Brent crude oil hit $105 a barrel, nearly 2.5 times higher than before.
- EVN data said the average retail price of electricity in 2022 has reached VND1,915 ($0.82) per kWh, 2.74 per cent higher than the current average rate applied since 2019, which is VND1,844 ($0.79)/kWh. According to MoIT, the average retail electricity tariff in Vietnam is adjusted when the input parameters including generation, transmission, distribution, operation, increase by 3 per cent or more.
- Special consumption taxes on gasoline to stay in place: MoF
Some highlines are as below:
- The Ministry of Finance said it does not support removing current special consumption taxes on petroleum in response to recent calls to drop taxes from the Vietnam Chamber of Commerce and Industry. Petrol use should remain conservative according to the ministry’s proposal to the National Assembly, citing similar taxes worldwide.
- “Vietnam’s current special consumption taxes can be considered as mid to low, especially in comparison to neighbouring countries such as Laos and Cambodia,” said a ministry spokesperson.
- The ministry said it supported other measures to bring down fuel prices, including a 50 per cent reduction of special consumption taxes on gasoline (E5 and E10 included), up to a 50 per cent reduction of VAT on diesel, kerosene oil and Fuel oil (FO).
- How much of a reduction in special consumption taxes on fuel is a matter for the NA’s Standing Committee to decide, according to the ministry.
- Economists predict that fuel prices will likely rise again, at least in the short term, after a recent OPEC+ decision to cut output by two million barrels daily.
- UNDP project to help Việt Nam further corruption fight
Some highlines are as below:
- The 27-month project is expected to help enhance capacities of anti-corruption agencies in effective measurement and monitoring of SDG anticorruption targets and increase participation of the society in anti-corruption fight.
- The United Nations Development Programme (UNDP) on Tuesday launched a new project to improve Việt Nam’s implementation of the United Nations Convention against Corruption (UNCAC).
- The project is supported by the Bureau of International Narcotics and Law Enforcement Affairs under the US Department of State, and the UNDP’s Anti-Corruption for Peaceful and Inclusive Societies (ACPIS) Global Programme. It is partly sponsored by the Norwegian Government through the ACPIS programme, with the aim of improving anti-corruption and transparency in the health sector in Việt Nam.
- In June of this year, in collaboration with the UNDP, the VCCI published a report on business perceptions of public procurement. The report found that over one-third of businesses agree that paying a commission is essential to improve chances of winning a contract. This figure rises to 50 per cent for businesses supplying medical equipment to public medical service providers.
- The UN Convention Against Corruption is the only legally binding universal anti-corruption instrument. UNCAC and its Implementation Review Mechanism have been critical in stimulating anti-corruption reforms and strengthening national commitments to act against corruption. Việt Nam ratified UNCAC in 2009 and since then has continued strengthening its implementation.
- Gasoline tax cut not on National Assembly agenda this time
Some highlines are as below:
- The proposal for cuts to special consumption tax and value added tax on gasoline will not be reviewed in the upcoming National Assembly session.
- Nguyen Minh Son, vice chair of the Economic Committee, said the government was yet to present a report to the National Assembly on decreasing the special consumption tax and value-added tax on gasoline.
- The Ministry of Finance has prepared a proposal wherein the special consumption tax on gasoline will be halved and value-added tax on gasoline and oil will be cut by 20-50%. The proposal has been submitted for review and inputs to the Ministry of Justice.
- Since October 3, the petroleum market, particularly in the southern region, has been experiencing supply shortages.
- People in the south have had great difficulty getting gasoline in recent weeks with many gas stations running out of fuel or selling restricted quantities as a running battle over commissions with oil companies disrupted supply.
- In HCM City, for example, 137 outlets did not have gasoline to sell on October 11. However, supplies resumed October 12 with authorities guaranteeing there would be enough gasoline for the next 10 days.