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Jul 04, 2022 / 14:45

Vietnamese Gov’t further cut taxes on petrol products

Once approved by the National Assembly, the cut will take effect on August 1.

The Vietnamese Government has proposed a further cut of environmental protection tax on petrol products by VND1,000 per liter and VND500 for diesel products, the largest margin possible, until late 2022.

 A petrol station in Hanoi. Photo: The Hanoi Times

The proposal was mentioned in Government’s resolution No.82 proposing lower rates on environmental protection tax on petroleum and gas products.

Under current regulation, the Standing Committee of the National Assembly would be responsible for making decisions on this issue.

According to the Government, the environmental protection tax would be halved from the current VND2,000 to VND1,000 per liter, resulting in the retail price of VND1,100 per liter for petrol products (including the VAT), and diesel products of VND500-700 per liter.

The tax cut is set to take effect from August 1 until the end of 2022, for which the Ministry of Finance estimated the State budget revenue would forego over VND1.4 trillion ($60 million) per month and a cumulative of around VND7 trillion ($300 million) for the August-December period.

In early March, the Government proposed the NA to halve the environmental protection tax on petroleum products, which took effect on April 1.

Environmental protection tax is an indirect duty collected on products/services that have negative impacts on the environment.

The authorities expected with a decline in environmental protection tax would help prevent petrol prices from rising and mitigate impacts on businesses and people.

In addition to this type of tax, the finance ministry said it would consider a similar cut in excise and value-added taxes, which are subject to the NA’s competence.

However, the upcoming session of the NA is set to take place in October.

Since early 2022, petrol prices underwent 17 adjustment periods, including four cuts and 13 increases. Prices of RON95-III currently making up 70% of the total amount of consumed petroleum products in Vietnam, rose to a record high of VND32,760 ($1.4) per liter as of present, VND7,400 higher than the prices in mid-January.

Meanwhile, prices of biofuel E5-RON92 stand around VND30,890 ($1.32) per liter, up VND7,700; and diesel at VND29,610 ($1.27), up VND11,400.