Mazut initiative short-circuited

September 10, 2011 | 15:24

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Electricity of Vietnam (EVN)’s proposal for a $5.6 million mazut import fee exemption has been slapped down.

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In light of Deputy Prime Minister Vu Van Ninh’s guidance relative to EVN’s proposal for a mazut tax break for its partner Hiep Phuoc Power Company Limited, state agencies shall calculate Hiep Phuoc Company’s mazut import fees pursuant to current regulations without tax incentives as proposed by the EVN.

The deputy prime minister’s guidance comes after the Ministry of Finance (MoF) sent a document to the government asking not to green-light the EVN’s proposal.

According to the MoF, Hiep Phuoc directly imports and operates authorised import of mazut for power generation at its own factory but not selling to market, so that the imported mazut is still subject to paying fuel charges in light of current regulations.

The MoF said the government would give the thumbs-up to charge and fee reductions and exemptions in special cases only.

The EVN said the group now owes $5.6 million to Hiep Phuoc, the amount is tantamount to the petroleum import fees (not including value added tax) the latter due to pay customs bodies.

According to the EVN, escalating power generation costs and dong-dollar exchange rate differences before 2010 were yet to be included in 2011 power prices. This pushed the group into poor financial health, so that it asked for the government permission not to pay mazut import fees for power generation at Hiep Phuoc.

Besides, EVN sought exemption for $5.6 million petroleum fees it currently owes to Hiep Phuoc.

vir.com.vn

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