HCMC – The Vietnam Chamber of Commerce and Industry (VCCI) has proposed reducing the environmental protection tax by VND1,000-2,000 on each liter of fuel, double the reduction proposed by the Ministry of Finance.
VCCI commented on the Ministry of Finance’s draft resolution on adjusting the environmental protection tax on fuel, except aviation fuel, until the end of this year. Accordingly, VCCI suggested cutting the environmental protection tax by VND2,000 on each liter of gasoline and VND1,000 on each liter or kilogram of diesel and lubricating oil, the local media reported.
The tax reduction may be applied for a shorter period, probably for three to six months, if the fuel prices are stable, instead of reducing the tax for eight months until the end of this year, VCCI suggested.
VCCI hailed the Ministry of Finance’s proposal on reducing the environmental protection tax on fuel to inhibit the fuel price rise, thus supporting local residents and enterprises to recover and develop after the pandemic.
However, the reduction of the environmental protection tax on fuel should be greater as the retail prices of fuel have reached their record levels and may increase further in the coming periods amid the escalating Russia-Ukraine crisis and economic sanctions, according to enterprises.
The State’s policies to cut taxes and fees are important to help enterprises recover. The solution is also feasible as Vietnam will benefit from the higher crude oil export prices and the positive State budget revenue in the first two months of the year.
Earlier, the Ministry of Finance on March 3 began consulting with the relevant ministries and agencies over the draft resolution on adjusting the environmental protection tax on fuel.
Under the draft resolution, the ministry proposed cutting the environmental protection tax from VND4,000 to VND3,000 per liter for gasoline, except ethanol, and from VND2,000 to VND1,500 per liter or kilogram for diesel oil, heavy fuel and lubricating oil.
Besides, the environmental protection tax would be halved from VND1,000 to VND500 per liter for kerosene, and from VND2,000 to VND1,500 for lubricant grease.
According to the ministry, if the tax cut is applied, the State budget would lose some VND12 trillion. Nevertheless, reducing the environmental protection tax on fuel will help bring down the retail prices of fuel and production costs.
The relevant ministries and agencies must offer feedback on the draft resolution no later than March 4. The Government will later submit the draft resolution to the National Assembly’s Standing Committee for approval.