A fuel station in Hanoi, Vietnam (Photo: VNA) According to the ministry, it has started a process to collectopinions and feedback on the extension, which is to be submitted to theNational Assembly for final approval. The tax cut, if passed by the NA, willtake effect on January 1, 2024.
The proposal is a continuation of an already-in-effect tax cut,which imposes a tax rate of 2,000 VND per litre for gasoline, 600 VND forkerosene, and 1,000 VND for diesel, fuel oil, lubricant and aeroplane fuel.
When the extension expires at the end of 2024, the tax rate willgo back to the previous level at 4,000 VND per litre for gasoline, 1,000 VND forkerosene, 2,000 VND for diesel, fuel oil and lubricant, and 3,000 VND foraeroplane fuel.
The ministry said the tax cut proposal is subject to change,depending on the global oil prices. The MoF has been and will continuecollaborating with other governmental ministries and agencies to monitordomestic fuel prices.
In addition, slowing down the rise of fuel prices will likelycontribute to the Government's inflation control efforts and stabilise themacro-economic factors.
All things remaining the same, the ministry said it anticipates adrop in domestic fuel prices in 2024 by 2,200 VND per litre for gasoline;aeroplane fuel by 2,200 VND; diesel, fuel oil and lubricant by 1,100 VND; andkerosene by 440 VND.
According to economists and policymakers, fuel plays an importantrole as input in many industries. By slashing the environmental tax, theGovernment is aiming to provide additional support to all economic stakeholdersand consumers, boosting economic recovery and helping businesses expandoperations.
On the other hand, budget collection will likely take a hit,according to the ministry. Given the same amount of consumption anticipated forthis year, the State budget will likely see a drop in environmental tax of 43trillion VND (1.75 billion USD).
The tax cut has been praised by economists and the businesscommunity as one of the more practical and most efficient support policies bythe Government for economic recovery post-COVID-19./.
VNA
