Vietnam feasibility study - EITI

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This is the biggest source of revenue among all economic sectors in the country. However, the budget
receipts from crude oil are much higher than those indicated on the statistic data of the General
Statistics Office. This is because the statistic data only reflects the budget receipts from crude oil that
include two main taxes, namely the natural resources tax and corporate income tax (in 2008, 2009 and
2020, for example). Some other receipts were not included, such as from personal income tax, exportimport
tax, environmental protection fee, bonus and especially, the profits in the production sharing
contracts. For instance, the amount of VND 58,000 billion contributed to the state budget by crude oil
in 2009 was only received from corporate income tax (VND 43,483 billions) and natural resources tax
(VND 14,517 billion) 8 .
According to the assessment of the parties, the collection and payment to state budget from petroleum
is fairly transparent thanks to the tight supervision mechanism in the petroleum sector, as well as to
the off-shore exploitation feature itself. Nevertheless, there still exist unclear points in some revenues
in the oil and gas industry. The following are some findings related to the actual financial obligations
of the oil and gas industry:
• Fee for purchase and use of petroleum information
According to provisions of the Law on Petroleum, PVN is responsible for providing and collecting a fee
for the purchase and use of information about petroleum from exploring and exploiting enterprises.
Previously, in some petroleum exploration contracts, this fee was included at a price of about US$
200,000/lot. At present, some enterprises are not required to pay this amount. The decision on the
sale of information about the petroleum lot is made during the negotiation and mentioned in the
petroleum contract. As a normal case, PVN only collects this fee for lots that cost PVN a large amount.
Meanwhile, the lots that cost less or are subject to investment incentives are exempted from this fee.
So far, however, there have not been any documents or public promulgations stipulating which lot or
project is obliged to pay this fee.
• Bonuses
Currently, in the petroleum sector, three bonuses are still applicable, namely for signature, commercial
discovery and production. The signature bonus is paid by the company immediately after signing the
petroleum exploration and exploitation contract. The commercial discovery bonus is charged when the
exploring company finds a commercial petroleum mine. The production bonus is charged when the
enterprise’s exploitation reaches a certain output level, normally about 50,000 barrels/day. Generally,
there is no specific regulation on the limit to the price of these bonuses. These fees are proposed by
the contractor in the bidding to the host country. A lot of petroleum lots, however, are not put out
to auction, resulting that the stipulation and collection of these bonuses are unclear. Regarding the
bonus levels, the signature bonus normally hovers around USD 5 million, commercial discovery bonus
about USD 10 million, and the production bonus about USD 10 million.
• Environmental protection fee
In line with Decree No. 63/2008 /ND-CP, the enterprises engaging in petroleum exploitation sector
are required to pay an environmental protection fee at the rate of VND 100,000/barrel. However,
many petroleum exploitation projects are exempted from this fee, even though they are not subject
to investment incentives. The regulations that the projects are not required to pay environmental
protection fee are reflected in internal documents issued by PVN and MOF. This point is unobvious
and unfair because such documents are not publicly or widely disseminated. Theoretically, the
*8: Ministry of Finance: http://www.mof.gov.vn/portal/page/portal/mof_en/State_Budget/dosb/es?p_folder_id=19235472&p_
recurrent_news_id=19236098
The Extractive Industries Transparency Initiative and the Implementation Perspective of Vietnam