Deputy Prime Minister Vu Van Ninh has denied a proposal, valued at US$5.6 million, based on tax free mazut oil imports by the Hiep Phuoc Power Company, following an Electricity of Viet Nam request.
Ninh’s desicion came after the Ministry of Finance urged the Government to reject tax incentives as required by EVN to help it deal with $5.6 million worth of debt owed to the Hiep Phuoc Power Company.
According to the Ministry of Finance, the Hiep Phuoc Power Company imports mazut oil for electricity production purposes at its plants, the oil not being for sale on the domestic market which necessitates its taxation.
The Ministry of Finance added that, as tax exemptions would only be allowed in cases of extreme necessity, the Hiep Phuoc Power Company would still have to pay a tax of VND300 per kilo for imported mazut oil.
EVN additionally owes the Viet Nam National Oil and Gas Group an amount of $400 million, equivalent to nearly VND8.2 trillion.
Hiep Phuoc imports mazut oil to produce electricity, which it sells to EVN. The $5.6 million, which the latter owes the former, includes taxes on petroleum imports claimed by customs, excluding value added tax (VAT).
According to EVN, it has continued receiving debt claims from the Hiep Phuoc Power Company, charges not mentioned in EVN’s proposal to raise electricity prices during March this year, meaning it would not have enough finances to repay its debts.
EVN, which owes the Hiep Phuoc Power Company an extra $41 million, has said that its present financial difficulties had forced it to call on the Government for a tax break.
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