Vietnam’s mining industry unable to enjoy tax incentives

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The mining industry faced difficulties in the first eight months of this year due to being unable to enjoy tax and land rental incentives, said Nguyen Huu Quang, deputy head of the National Assembly’s Committee on Finance and Budget.

The National Assembly and the Government have issued many policies to reduce taxes, fees, charges and land rents and extend payment deadlines to support amid the COVID-19 pandemic. However, the mining industry has not accessed these incentives.

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The General Statistics Office (GSO) reported the index of industrial production (IIP) for the first eight months of this year was estimated to surge by 2.2 percent year-on-year, while the mining industry’s IIP reduced 7 percent.

According to the amended articles of the Law on Value added Tax (VAT), exported goods, which have the total value of natural resources, mineral resources and energy cost accounting for 51 percent or more of the product cost, do not enjoy reduced or refunded VAT for input materials. These goods do not also enjoy export tax incentives under the Import – Export Tax Law.

These factors are why the mining industry has had negative growth in the first eight months, according to Quang.

The GSO said Vietnam’s industrial production faced more difficulties in August when the pandemic resurged in late July.

The national IIP in August increased by about 3.5 percent over the previous month, but decreased by 0.6 percent over the same period last year. Of which, IIP decreased by 5.1 percent for the mining industry, 0.1 percent for the processing and manufacturing industry, and 0.7 percent for electricity production and distribution. While, that of water supply, waste and sewage management and treatment increased by 2.2 percent.

The IIP in the first eight months of this year was estimated to increase by 2.2 percent year-on-year. However, it was much lower than the growth rate of 9.5 percent in the first eight months of 2019.