Vietnam Legislature Mandates Further 50% Cut in Environment Tax on Fuel
For the second time in three months, Vietnam's national parliament approved a measure to reduce the environmental tax on fuel by half, as rising energy prices put pressure on inflation.
The prolonged cut, which will be in effect from July 11 to the end of the year, intends to assist Vietnam weather the detrimental effects of rising transportation costs on the economy.
Vietnam intends to keep inflation below 4% in 2022. Its consumer prices were up 3.37 per cent year on year in June, led by rising food and energy costs, while transportation costs increased by 21.4 per cent year on year.
The environment tax on gasoline and diesel fuel would be cut in half, to 1,000 dongs ($0.0428) and 500 dongs ($0.0428) per litre, respectively.
Tax on jet fuel will be decreased by 500 dongs to a base price of 1,000 dongs per litre, but kerosene tax will remain at 300 dongs per litre.
The finance ministry anticipated that the increased rates would lower tax collection by 32.5 trillion dongs ($1.39 billion).
Last week, the Southeast Asian government announced plans to reduce its Most Favored Nation tariff on gasoline from 20% to 12%, as well as reduce special consumption tax and value-added tax on fuels.