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Friday, July 19, 2024

Government proposes extending fuel environment tax cut to late 2024

The Saigon Times

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HCMC – The Government has asked the National Assembly Standing Committee for approval of an extension of the environment tax cut for fuel until the end of next year.

As per the proposal, the environmental protection tax would be VND2,000 per liter for gasoline, VND1,000 for jet fuel, diesel oil, heavy fuel oil, lubricating oil, and lubricant grease, and VND600 for kerosene. Should these tax rates be approved for extension, consumers would benefit from a reduction of VND1,000 to VND2,200 for every liter of gasoline and VND660 for each liter of kerosene.

Commencing on January 1, 2025, the tax rate would be increased to the ceilings of the respective tax rates. Specifically, the tax for gasoline would be VND4,000 per liter; jet fuel to VND3,000 per liter; diesel oil, heavy fuel oil, and lubricating oil to VND2,000 per liter; kerosene to VND1,000 per liter; and lubricant grease to VND2,000 per liter.

It is estimated that environmental tax revenue from fuel would decrease by VND38,929 billion annually due to this reduction. However, the Government underlines the importance of reducing the environment protection tax, as this policy is expected to maintain local fuel prices at stable levels and provide support to businesses, ultimately aiding in inflation control and ensuring macroeconomic stability.

The current environment protection tax rates are 50% lower than the tax bracket and these rates have been in effect since April 1, 2022 and will revert to these original levels on December 12, 2023 if the extension is not approved.

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