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A worker at a fuel station in Hoan Kiem district, Hanoi |
The tax cut, which was set to expire on January 1, 2025, is to continue for another year until December 31.
Previously, environmental tax rates in Vietnam were set at 4,000 VND per liter for petrol (excluding ethanol), 3,000 VND per liter for jet fuel, 2,000 VND per liter for diesel, 1,000 VND per liter for kerosene, 2,000 VND per liter for mazut oil, 2,000 VND per liter for lubricating oil and 2,000 VND per kilogram for lubricating grease.
During a recent meeting with the committee, Minister of Finance Nguyen Van Thang warned that removing the tax cut could negatively affect the economy. Higher environmental taxes on petrol, oil, and lubricants may increase retail prices, exerting upward inflation pressure and potentially hindering economic growth targets.
The Government, therefore, proposed that the tax be reduced for another year at 2,000 VND per liter for petrol (excluding ethanol), 600 VND per liter for kerosene, 1,000 VND per liter for jet fuel, diesel, mazut oil, and lubricating oil and grease to help control inflation, ensure macro-economic stability, and ease difficulties for businesses and the public.
Chairman of the N.A.’s Finance and Budget Committee Le Quang Manh said the vast majority of the committee members supported the tax cut for another year. The N.A., however, advised the Government to take additional measures to ensure that the proposed tax reductions do not affect the Government’s budget revenue and expenditure estimates for 2025, previously approved by the N.A.
Chairman of the N.A.’s Law Committee Hoang Thanh Tung said that the Government should conduct studies and review current policies and assess their impacts to determine whether the reduced tax rates can continue in 2026. Removing the tax cut should be done carefully and gradually, giving businesses and the public time to adjust.
N.A. Chairman Tran Thanh Man proposed that the Government consider a gradual tax increase schedule to eventually apply the rates specified in Resolution 579/2018/UBTVQH14. He stressed the need for the tax rates to align with the principles of environmental protection taxes, reflect global crude oil price trends and fulfill Vietnam’s international commitments to protecting the environmental and fighting climate change.
N.A. Vice Chairwoman Nguyen Thi Thanh said additional efforts are needed to improve the Government‘s policy forecasting and implementation.
During the meeting, participating members of the Standing Committee unanimously approved the tax cut.
Source: VNA