Has iron ore
been smuggled across the border?
The Minister of Industry and
Trade Vu Huy Hoang told the mid-year National Assembly session that the
Ministry would put an end to the exploitation and processing of raw minerals,
especially the exploitation of gold.
Nearly half a year later, Directive
2 on strengthening the management of mineral exports, which put an end to the
export of iron ore, the rate rose to 40%.
Many countries have long abandoned
this tax.
Mr. Do Thien Anh Tuan of the
Fulbright Economics Teaching Program said that high tax rates could urge
smuggling and benefit some subjects and worse, this policy has by chance
supported
It creates lucrative opportunities
for some nefarious interest groups, from businesses using steel as raw
material inputs to resource management, import and export agencies.
If the government truly wants to
regulate the output, the natural resource rate which is currently at 12
percent should be raised, and management of iron ore resources should be
improved, Tuan suggested.
The shortcomings of policies have
caused real impacts as iron ore continues to be smuggled across the border.
There were significant differences
in both the quantity and price of Vietnamese iron ore exported to
Consequently,
The Customs Newspaper cited sources
from the Ministry of Industry and Trade as saying that the total design
capacity of the operating iron mines in the country is about 4.5 million tons
per year, far exceeding domestic demand. This figure is almost exactly equal
to the amount of ore
So the question remains: where do
the sources of iron ore for Vietnamese factories using blast furnace
technology (producing steel from iron ore) originate?
The Hoa Phat Group alone used 1.6
million tons of iron ore in 2013. In addition, after the Directive 2 took
effect, the prices of domestic ore were cheaper than imported ore. Is it true
that the total design capacity of iron mines in 2013 was not 4.5 million tons
as calculated by the Ministry of Industry and Trade?
In fact, the State management
agencies faced many difficulties in controlling the output of each mine. A
report by the Ministry of Natural Resources and Environment said that as of
May 2013, nearly 90% of the total number of 4,782 valid mining licenses were
granted by provincial authorities.
An economist said that big mines
would have been licenced by the central government but they were broken down
into smaller mines to give control to local governments.
In 2013 the national inventory of
iron ore is about 3 million tons. Many mines said they could not find
domestic customers.
These was the grounds for the
Ministry of Industry and Trade to submit its "temporary solutions"
to the government, allowing the export of 1.9 million tons of iron ore.
Despite oversupply, not everyone
could buy iron ore directly from mines, particularly the firms requiring
invoice transparency.
According to the Ministry of
Industry and Trade, in the past 12 years, the budget annually spent VND180
billion ($9 million) for basic investigation of minerals.
The Department of Mineral
Operational Control of the Ministry of Natural Resources and Environment also
reported that less than half of the mining organizations submitted their
periodic reports to the Ministry and many reports were insufficient. Miners
self declared their output to the state and they paid taxes based on that.
The considerable difference in
prices and output of iron ore for exports recorded by the Vietnamese and
Chinese customs agencies is not a new story. Shipping iron ore requires
motorized vehicles, by road, river or sea, so how can iron ore be smuggled
across the border?
Thuong Tung,
|
Thứ Ba, 2 tháng 12, 2014
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