Reducing environmental tax on gasoline from 1/4

The National Assembly Standing Committee has just agreed to reduce the environmental tax by 2,000 VND per liter of gasoline until the end of this year, at the request of the Government.

On the afternoon of March 23, the National Assembly Standing Committee continued its 9th session, giving opinions on the proposal to reduce environmental protection taxes on gasoline and oil. After discussion, the members voted to pass the resolution, with the tax reduction as proposed by the Government.

Items Current Tax Tax reduced from April 1 to the end of 2022
Gasoline (except ethanol) 4,000 won 2,000 won
Flight fuel 1,500 yen 1,500 yen
Diesel, madut, lubricant 2,000 won 1,000 yen
kerosene 1,000 yen 300
Grease 2,000 won 1,000 yen

Unit: VND

This tax will be reduced from April 1, 2022 to December 31, 2022. After this date, the tax will return to the applicable rate, which is 3,800-4,000 VND for gasoline, 2,000 VND per liter for oil.

After this tax reduction, each liter of gasoline is expected to decrease by VND 2,200 (including VAT) and the price of oil will also be adjusted by VND 1,100.

According to calculations by the Ministry of Finance, the amount of environmental protection tax collected on gasoline, oil and grease (based on consumption volume in 2019) will decrease for the whole year by about 29,035 billion VND. Therefore, National Assembly Chairman Vuong Dinh Hue suggested the Government and the Ministry of Finance have a plan to calculate revenue increase in other areas, to prevent loss of budget revenue when reducing this tax.

Earlier, during the discussion on the Government’s proposal, National Assembly Chairman Vuong Dinh Hue suggested that only “the maximum amount of tax reduction proposed by the Government” should be stated in the resolution. The rest, authorizing the Prime Minister to flexibly decide the tax rate from time to time.

This creates conditions for the Government to regulate gasoline prices according to the world market and each time this tax adjustment will not have to be submitted to the National Assembly Standing Committee. According to him, although there is no hard regulation, authorizing the Prime Minister to flexibly decide this tax reduction is “not wrong in terms of authority”.

Mr. Nguyen Phu Cuong, Chairman of the Finance and Budget Committee, also agreed and said that this way would create conditions for gasoline prices to stick to world market prices. He analyzed, the National Assembly Standing Committee for a maximum reduction of 2,000 dong per liter, this month the Government can reduce it by 1,000 dong, next month 1,500 dong and then another 2,000 dong… The reductions are based on world price fluctuations. which is currently unpredictable.

But after explaining, Finance Minister Ho Duc Phuc (who reads the report on behalf of the Government and participated in the meeting) suggested that the resolution be “hardened” in order to be “easier to implement”.

According to the provisions of the Law on Environmental Protection, the authority to decide on this tax adjustment belongs to the National Assembly Standing Committee.

Sau hội ý, Bộ trưởng Tài chính Hồ Đức Phớc đề xuất nghị quyết vẫn ghi mức giảm “cứng” 2.000 đồng như đề xuất của Chính phủ.

Ngoài giảm thuế bảo vệ môi trường, cơ quan thẩm tra của Chính phủ nêu đề nghị về điều hành mặt hàng này. Chính phủ nên cân nhắc giảm thuế nhập khẩu tối huệ quốc (MFN) với xăng, và coi đây như một biện pháp bổ sung để can thiệp trong trường hợp giá dầu thô thế giới biến động. Mức giảm thuế này sẽ được tính toán trên cơ sở đánh giá tình hình nhập khẩu từ các nước ASEAN, Hàn Quốc, Singapore… và biến động giá thế giới.

Uỷ ban Tài chính ngân sách cũng đề nghị Chính phủ tăng cường quản lý, kiểm tra và có biện pháp xử lý để giảm áp lực nguồn cung trên thị trường. Việc này nhằm đảm bảo các doanh nghiệp đầu mối xăng dầu trong nước sử dụng đúng quy định với lượng xăng dầu dự trữ thương mại của doanh nghiệp.

Việc giảm chu kỳ điều hành giá cũng là một phương án được Uỷ ban Tài chính Ngân sách đưa ra, nhằm để giá trong nước sát hơn với diễn biến thế giới.

Về lâu dài, ngoài việc trích lập Quỹ bình ổn giá xăng dầu bằng tiền, Chính phủ cần nghiên cứu khả năng bổ sung công cụ cho Quỹ bằng hiện vật (xăng dầu). Để đa dạng hóa các công cụ có thể sử dụng tham gia điều tiết, hỗ trợ cho mục tiêu bình ổn thị trường xăng dầu trong nước.

Petrol prices recently fluctuated strongly with 6 consecutive increases and 1 decrease since the beginning of the year. At the beginning of March, the retail price of gasoline in the country reached the highest level in history, nearly 30,000 VND per liter. However, on March 21, it decreased slightly, currently at 29,190 VND per liter of RON95 gasoline, 28,330 VND per liter of E5 RON92…

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