Finance ministry moots halving of coal export tax

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Vietnam's Finance Ministry has suggested that the government reduce the export tax on coal from 20 to 10 percent.

The suggestion was made after the state-owned Vietnam National Coal and Mineral Industries Corporation, Vinacomin, reported a sharp drop in sales in the first seven months this year.

Vinacomin recently said it sold 21.8 million tons of coal during the period, approximately 48 percent of the annual plan, news website VnEconomy reported Tuesday.

The number included exports of 7.2 million tons, which fell 27 percent over the same period last year.

The group added that as of late July, it had an inventory of more than 9 million tons of the fuel.

According to the Finance Ministry, Vinacomin will not be able to sell coal abroad with the export tax at 20 percent.

It explained that the tax adds to the cost price of exported coal, making it less competitive than products of other countries, of which prices so far have fallen 25-40 percent over the same period last year due to the ongoing economic slump.

But if taxes are reduced to 10 percent, the group can export some 6.5 million tons of products in the next four months, the ministry estimated.

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In the current economic slowdown, some major exporters have cut taxes on coal exports to zero percent and Vietnam should follow the suit to boost coal exports and reduce the inventory, the ministry's proposal mentioned.

Vinacomin had already requested the government in mid-June to cut the 20 percent export tax on coal to a more reasonable level, saying it has to face strong competition from other countries as demand declines, local media reported.

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