Under the proposal, during the resolution’s validity period, the environmental protection tax on petrol (excluding ethanol) and aviation fuel would be reduced from 2,000 VND (0.076 USD) per liter to 1,000 VND per liter. The tax on diesel would be halved from 1,000 VND to 500 VND per liter. These rates would apply throughout the implementation period, including any extension if deemed necessary.
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A motorbike is refilled at a Petrolimex station. |
Once the resolution expires, petrol, aviation fuel and diesel products would revert to the tax levels stipulated in the N.A. Standing Committee's Resolution No. 109/2025/UBTVQH15.
According to the Ministry of Industry and Trade, the environmental protection tax currently accounts for approximately 6.7% of the base price of fuel products. Amid rapid fluctuations in global fuel prices, reducing the tax is seen as a necessary measure to stabilize the domestic market.
As bringing the tax down to zero would require approval from the N.A., the ministry has proposed cutting rates to the lowest possible level within the authority of the N.A. Standing Committee, focusing on petrol, diesel and aviation fuel.
The draft proposes that the reduced tax rates be applied from the date of resolution issuance until June 30, 2026, with the Government authorized to adjust the timeframe in line with evolving conditions. During this period, the tax rates under Resolution No. 109/2025/UBTVQH15 would be temporarily suspended for the specified products.
The MoF estimates that the tax cuts would lower State budget revenues by around 1.79 trillion VND per month, including reduced value-added tax collections. However, it considers this a necessary support measure to ease input costs, assist businesses and households, and stimulate production and business activities.
The MoF also emphasized that the proposed adjustment remains within the scope of the Law on Environmental Protection Tax and falls under the authority of the N.A. Standing Committee, representing a flexible policy tool to achieve socio-economic development targets for 2026, particularly in maintaining macroeconomic stability and controlling inflation.
Source: VNA