VietNamNet Bridge – The Government Office has announced the conclusion of Prime Minister Nguyen Tan Dung. Accordingly, the Vietnam Oil and Gas Group (PetroVietnam) will have to pay additional nearly VND11 trillion ($500,000) to the state budget. This amount is related to the "oil and gas interest of the host country" in 2009-2011.

In addition to this large amount of money that PetroVietnam has "forgotten" to pay to the budget, though it was reminded by the Finance Ministry twice, this group may have to pay fines worth nearly VND500 billion ($25 million) for not paying luxury tax.

In June 2011, the Ministry of Finance issued a written document, asking PetroVietnam to pay to the budget the “oil and gas interest of the host country” in 2009-2011, which was estimated at over VND19 trillion ($950 million). After that, the Ministry of Finance continued to check and once again asked this group to pay this kind of money to the budget. That time the amount was up to VND21 trillion ($1.05 billion).

PetroVietnam said it did not "forget" to pay the money and correctly applied the provisions of the Government. However, the Government Office has released a document notifying the conclusions of Deputy Prime Minister Vu Van Ninh.

Accordingly, after working with PetroVietnam and the Ministry of Planning and Investment, the Ministry of Finance, and the Ministry of Industry and Commerce, the Deputy PM decided that PetroVietnam will have to pay 50 percent of the "oil and gas interest payments for the host country” from the Vietsovpetro joint venture, the interest from sharing contracts and oil and gas documents to the budget. The remaining 50 percent is used to invest in key oil and gas projects.

An official of the Ministry of Finance told Tuoi Tre Newspaper on November 4 that PetroVietnam will have to pay 50 percent of the VND21 trillion to the state budget. However, this group has just paid only VND1 trillion. The remaining amount of nearly VND10 trillion, PetroVietnam will have to return to the budget from now until the end of 2012 and this is a very important source of money in the context of a difficult budget year.

Not paying VND500 billion of tax, being fined for over VND495 billion

PetroVietnam was ranked as the largest business in Vietnam in 2011 but according to the list of the top 1,000 corporate income taxpayers in 2012, this group ranks fifth, compared to 4th last year, even behind Viettel, Incombank and Vinacomin.

The Ho Chi Minh City Tax Department has recently decided to impose fines on PetroVietnam. Accordingly, this group will have to additionally pay over VND500 billion of luxury tax and fines of over VND495 billion (nearly $500 million in total).

PetroVietnam has asked the Ministry of Finance to consider the Ho Chi Minh City Tax Department’s decision to not have to pay luxury tax and fines.

An official of the Ministry of Finance said that the Ho Chi Minh City Tax Bureau cannot be completely wrong and it is likely that PetroVietnam will still have to pay a fine.

Translated from Tuoi Tre
By Le Ha