Việt Nam proposes extending fuel tax cuts to the end of June

Việt Nam proposes extending fuel tax cuts to the end of June

The Ministry of Finance has proposed extending tax cuts on gasoline, diesel and jet fuel until June 30, 2026, in a bid to stabilise domestic fuel prices and support economic growth amid global market volatility.

A petrol station of Petrolimex in Hà Nội. The Ministry of Finance has proposed extending tax cuts on gasoline, diesel and jet fuel until June 30, 2026. — VNA/VNS Photo Trần Việt

Under a draft National Assembly resolution, the ministry proposes reducing the environmental protection tax to zero Vietnamese đồng on gasoline (excluding ethanol), diesel and jet fuel from April 16 to June 30, following the expiry of the Government’s Decision 428/QĐ-TTg, which cut the tax rates to zero from midnight on March 26 to April 15.

According to Resolution 109/2025/UBTVQH15, in force from January 1 to December 31, environmental tax rates are set at VNĐ2,000 per litre for gasoline (excluding ethanol), VNĐ1,500 for jet fuel and VNĐ1,000 for diesel.

The Ministry of Industry and Trade said the environmental protection tax currently accounts for about 5.94 per cent of the base price of gasoline and 2.67 per cent for diesel.

The ministry also proposed exempting these fuels from value-added tax declaration and payment, while still allowing deductions of input VAT. National Assembly Resolution 204/2025/QH15, dated June 17, 2025, sets VAT on petrol, diesel and jet fuel at 8 per cent, applicable from July 1, 2025 to the end of 2026.

The ministry said VAT accounts for about 7.41 per cent of base fuel prices, adding that an exemption is increasingly necessary to ease domestic fuel costs amid global volatility.

In addition, the special consumption tax on gasoline is proposed to be reduced to zero until the end of June.

The Government’s Decision 428/QĐ-TTg set the special consumption tax on gasoline at zero until April 15. If the decision expires, the tax will return to 10 per cent on gasoline, 8 per cent on E5 biofuel and 7 per cent on E10 biofuel.

The special consumption tax accounts for 6.69 per cent of base fuel prices.

The tax cuts would allow corresponding reductions in domestic fuel prices and help contain inflation, the ministry said.

The draft resolution also notes that the Government may adjust the duration of the tax relief depending on economic conditions and market developments.

The proposal is currently open for public consultation on the Ministry of Finance’s portal. 

Bizhub