Legislators debate mandatory fees for mining organisations and individuals

November 05,wap ty le 2024 - 17:35 Your browser does not support the audio element. Several key points still require further discussion by deputies

Chairman of the NA’s Committee on Science, Technology and Environment, Lê Quang Huy, speaks at the session on Tuesday. VNA/VNS Photo

HÀ NỘI — Legislators on Tuesday continued discussions on the draft Law on Geology and Minerals, focusing on provisions that would require mining organisations and individuals to pay annual fees toward infrastructure maintenance and environmental protection as part of their social responsibility.

Presenting a summary of the draft law at the ongoing eighth session of the 15th National Assembly (NA), Chairman of the NA Committee on Science, Technology and Environment Lê Quang Huy noted that the draft law now consists of 12 chapters and 116 articles.

However, several key points still require further discussion.

Regarding the responsibility of mining organisations and individuals, Huy mentioned that some NA deputies proposed adding a regulation for annual contributions by mining entities to fund infrastructure investment, upgrades, maintenance and environmental protection, aiming to reinforce their accountability.

There were two main perspectives on this issue. The first view supported adding a legal basis in Article 8 to mandate that mining organisations and individuals financially contribute at a level determined by the provincial People’s Council. The advantage of this proposal is the legal foundation it offers to ensure compliance with financial support requirements.

However, some argued that this shifts from voluntary support as currently outlined in the existing Law on Minerals to a mandatory obligation, a new policy that lacks an impact assessment. Deputies also raised concerns that without clear principles for setting contribution rates, there is potential for inconsistent application.

Furthermore, allowing mining organisations and individuals to "account for their support costs in production expenses" might conflict with the Corporate Income Tax Law, which stipulates that deductible expenses should directly relate to production and business activities.

As mining organisations and individuals already make tax, fee and mining rights payments to the State budget, deputies argued that making additional financial support mandatory would be unfair compared to other economic sectors and would impose a significant cost burden on mining entities.

In the second view, NA deputies suggested retaining the current provisions of the Law on Minerals, following Option 2 in Clause 3, Article 8 of the draft law. The advantage of this approach is that it does not introduce new policies, preserving the original intent of voluntary financial support. However, a drawback is that this approach may lead to inconsistent compliance by mining organisations and individuals, as few localities are currently implementing this policy.

The NA Standing Committee recommended that the Assembly consider and provide feedback on this matter.

Regarding the management of Group 4 minerals such as clay, soil, rocky soil and similar materials suitable mainly for land reclamation and construction fill, some deputies suggested keeping licensing procedures for exploration and extraction of these materials to prevent a legal gap that could lead to violations and undermine effective State management in the mineral sector.

Taking into account the feedback from NA deputies, the NA Standing Committee agreed to retain the licensing requirements for Group 4 minerals but proposed simplifying the procedures to streamline resource allocation and promote socio-economic development, Huy said.

On the issue of mining rights fees (Article 101), Huy noted that some deputies expressed their opinions that the fees were impractical and misaligned with current realities.

There were suggestions to remove the mining rights fees altogether and clarify the difference between these fees and the resource tax.

The NA Standing Committee argued that, after 13 years of implementation, the mining rights fees had helped reduce speculative holding of mining rights, limited hoarding for resale and attracted financially capable investors.

To address current challenges, the draft law proposes calculating mining rights fees on an annual basis, based on actual extracted volumes, according to the committee.

Under this new regulation, mining rights fees would not be affected by geological reserves or unextractable portions, nor would they apply when mines cannot yet be operational due to objective reasons.

The distinction between mining rights fees and the resource tax is that, for the resource tax, organisations and individuals declare their actual monthly extraction volumes and settle accounts annually.

For mining rights fees, the draft law proposes that State management agencies will approve the fees based on estimated mineral reserves. Organisations and individuals would make a single payment at the beginning of the year, with final settlement based on actual extraction volumes over a specified period.

Any excess payment would be rolled over to the next payment period, while any shortfall would require an additional payment. — VNS