According to the ministry, the move will encourage the thrift and effective use of energy and natural resources, and the production and consumption of eco-friendly products, while reducing emissions and fulfilling Vietnam’s international commitments to environmental protection.

Agreeing with the suggestion, experts underscored the need for strong measures to curb environmentally-threatening activities by both individuals and organizations and raise public awareness of environmental protection and eco-friendly products.

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Photo for illustration. Source: cafef.vn

At the same time, the tax also contributes to the State budget. In other countries, environmental protection taxes are estimated to account for around 5 percent of the gross domestic product (GDP) on average.

The ministry estimated that environment protection tax collection will hit nearly VND 57.3 trillion (USD 2.51 billion) per year, marking an annual rise of more than VND 15.68 trillion, some VND 55.6 trillion of which was from petrol taxes.

Chairwoman of the Vietnam Tax Consultants’ Association Nguyen Thi Cuc said petrol prices in Vietnam are now lower than in neighboring countries Laos, Cambodia and China, ranking 45th out of 170 globally. Meanwhile, petrol import tariffs have been cut to 10-20 percent from the previous 40 percent under tax reduction road-maps, thus affecting State revenues.

The tax revision, scheduled to be valid in July 1, is forecast to raise the consumer price index (CPI) in July by 0.27-0.29 percent compared to June and the yearly CPI by 0.11-0.15 percent, according to calculations of the Finance Ministry.

Source: VNA