A worker holds a fuel nozzle at a station in Ho Chi Minh City. Photo by VnExpress/Huu Khoa
The Ministry of Finance is seeking public feedback on a draft resolution to adjust environmental protection tax rates on fuel products to address energy market volatility and help curb inflation.
Under the proposal, during the resolution’s validity period, the environmental protection tax on petrol (excluding ethanol) and aviation fuel would temporarily be reduced from VND2,000 (7.6 U.S. cents) per liter to VND1,000 per liter. The tax on diesel would similarly be halved from VND1,000 to VND500 per liter. These rates would apply throughout the implementation period, including any extension if deemed necessary.
According to the Ministry of Industry and Trade, the tax currently accounts for approximately 6.7% of the base price of fuel products. Amid rapid fluctuations in global fuel prices, reducing the tax is seen as necessary to stabilize the domestic market.
As bringing the tax down to zero would require approval from the National Assembly, the ministry has proposed cutting rates to the lowest possible level within the authority of the NA Standing Committee.
The draft proposes that the reduced tax rates be applied from the date of resolution issuance until June 30, with the government authorized to adjust the timeframe in line with market conditions.
The finance ministry estimates that the tax cuts would lower state budget revenues by around VND1.79 trillion (US$67.9 million) per month, including reduced value-added tax collections.
It also emphasized that the proposed adjustment remains within the scope of the Law on Environmental Protection Tax and falls under the authority of the NA Standing Committee, representing a flexible policy tool to achieve socio-economic development targets for 2026, particularly in maintaining macroeconomic stability and controlling inflation.
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