Vietnam cuts petrol tax to stabilise market

Vietnam cuts petrol tax to stabilise market

Vietnam has temporarily cut its environmental protection tax on petrol, diesel and jet fuel to zero, as the government moves to stabilise the domestic fuel market and safeguard energy security.

Vietnam stabilises its petrol tax

Vietnam has temporarily cut its environmental protection tax on petrol, diesel and jet fuel to zero, as the government moves to stabilise the domestic fuel market and safeguard energy security.

Under the prime ministerial Decision No.428/QD-CP, petrol, diesel and jet fuel will also be exempt from VAT declarations and payments, while still permitting firms to claim input VAT deductions.

The special consumption tax on petrol is also set at zero per cent.

The decision is taking effect from March 26 midnight through April 15.

It is considered an urgent solution to stabilise the domestic fuel market and safeguard energy security, and simultaneously ease the burden on households and help firms sustain production and trade, even as it trims state budget revenue by an average of about $288 million per month.

The government must report any adjustments to fuel tax rates to the National Assembly by March 30.

The decision followed the government's Resolution No.68/NQ-CP issued on March 26, which authorises the prime minister to apply tax reductions on petrol, diesel and jet fuel when required to serve national interests.

The Ministry of Industry and Trade (MoIT) and the Ministry of Finance decided to further cut retail fuel prices, effective from midnight on March 26.

Previously, since March 10, authorities continuously used the fuel price stabilisation fund, with spending ranging from VND3,000- 5,000 per litre for petroleum products. In the latest adjustment, however, the two ministries suspended the use of the fund.

According to the MoIT, Vietnam’s fuel prices remain at an average level in the region and are lower than those in neighbouring countries sharing land borders.

The ministry said it will coordinate with relevant agencies to inspect and supervise fuel traders to ensure adequate supply for the domestic market, while strictly handling any violations.

VIR