Vietnam proposes doubling coal export quota

Vietnam’s finance ministry has proposed doubling the country’s annual coal export quota to reduce a mounting stockpile, after first rejecting a proposal to lower taxes on the fuel to boost domestic sales, according to a government news website report.

Long- time net coal exporter Vietnam turned net importer last year as it held on to local output to help meet rising domestic demand, but cheap imported coal and a recent increase in natural resource taxes have hurt domestic sales, the report said.

In July, Vietnam raised the national resource taxes on two different grades of coal to 10 percent and 12 percent, up from 7 percent and 9 percent, and state- owned mining firm Vinacomin proposed cutting these taxes back down to regional levels of 5 percent and 7 percent.

But the finance ministry rejected Vinacomin’s proposal, citing state budget concerns and the need for time to assess the new rates, the report said.

Instead the ministry proposed raising Vietnam’s annual coal exports quota to 3- 4 mil- lion tons for the years 2017- 20, from 2 million tons a year previously.

“This is a more feasible solution compared with cutting taxes as it can trim the stockpiles of coal that has low domestic demand while not affecting state budget revenue,” the finance ministry said in a statement posted by Vinacomin on its website.