Airlines’ bid to suspend taxes rejected

In a document sent to related ministries and agencies and the two companies on Tuesday, Deputy Minister of Finance Vu Thi Mai said collecting VAT and environment protection tax is subject to the rules of the National Assembly Standing Committee. Therefore, the involved companies are required to adhere to the tax payment in line with the law, Mai asserted.

The application of petrol import tax should be based on the finance ministry’s regulation upon import schedules. The prevalent tariff is now fixed at 12 per cent as per Circular 109/2012/TT-BTC issued on July 3, 2012 but the ministry said the lowest level might be put at 7 per cent.

In May, both airlines submitted to the ministry the petitions clarifying their current financial plight in an effort to persuade the ministry to delay the tax collection schedule.

Vietnam Airlines complained that it was unable to obtain the year’s target in the first four months due to the economic slowdown. Moreover, rising input costs with the average fuel price picking up by 7.4 per cent compared to the planned price has pushed the national flag carrier’s expenses up by VND303 billion.

Vietnam Airlines asked for assistance from the ministry by not imposing import taxes on jet fuel if the fuel price stays at $118 a barrel or higher.

Similarly, Jester Pacific in its submission also proposed the ministry to levy an import tariff of 0 per cent if the fuel cost is fixed from $110 per barrel.

In response to the two aviation firms’ requests, the finance ministry insisted that jet fuel bought at home is levied an environment tax of VND1,000 a litre and VAT of 10 per cent.

Meanwhile, the imported products are imposed an import tariff of 12 per cent besides the aforesaid environment tax and VAT.