VietNamNet Bridge - The Ministry of Finance (MOF) plans to ask petroleum traders to pay 0.5 percent of their annual sales to the environmental risk prevention fund.

Under a draft circular that guides the implementation of the Environmental Protection Law drafted by MOF, an environmental risk prevention fund would be set up which aims to prevent, settle and compensate for damages caused by environmental incidents during enterprises’ production. 

Petroleum enterprises will have to make a contribution to the fund with money deducted from their annual revenue.

Le Quoc Tuan, a lecturer of the HCMC Agriculture & Forestry University, said the fund was the right decision but it was set up a bit late. Similar funds have been operational in many countries in the world for a long time.

Petroleum enterprises will have to make a contribution to the fund with money deducted from their annual revenue.

Tuan went on to say that protecting the environment must be the task of the whole society, therefore, all production fields that cause pollution, such as the dyeing industry and chemical production, must also make a contribution to the fund.

“Petroleum products have big impact on the environment. Petrolimex is a large corporation, so it will pay for repairing the damages in incidents related to the environment,” he said. 

“In the immediate time, petroleum companies will make a contribution to the fund first. Later, enterprises in other business fields will also have to do this,” he said.

When asked to describe the difference between the environmental protection tax and the environmental risk prevention fund, Tuan said enterprises have to pay tax even though no environmental incident occurs, while the fund will only pay money in case of incidents to repair damages.

If no environmental incident occurs, the money handed in by petroleum enterprises will be returned to them.

“This is just like putting money into piggy bank. The money will be spent only when necessary,” he explained.

Also according to Tuan, the fund would be established with people’s money, though petroleum enterprises make contributions to the fund.

“Petroleum enterprises won’t make a contribution to the fund with their own money. Once the fund is set up, they will count on petrol prices and raise retail prices,” he explained.

Meanwhile, an analyst warned that the MOF’s attempt to force petroleum distributors to make a contribution to the fund may face strong opposition from enterprises and the public. 

People complain that the petrol price in Vietnam is higher than in many other countries because of high tax and many kinds of fees. They may complain that the contribution to the fund would worsen the burden on enterprises.

Dat Viet