Finance ministry seeks further gasoline tax cut
In this article (5)
The Ministry of Finance is set to propose a further environment tax reduction on gasoline amid surging prices.
It wants to scrap the tax altogether after the National Assembly approved a 50 percent reduction to VND2,000 ($0.086) per liter starting April. The finance ministry on April 21 sought official feedback on a proposal to lower gasoline import prices from 20 percent to 12 percent.
Although such a reduction won’t bring down gasoline prices, it will help to diversify gasoline import markets and avoid dependence on South Korea and ASEAN, which are offering incentive import taxes.
These proposals show the effort of the Vietnamese government in containing inflation, which has become a topic of concern this year as prices of key commodities surged globally.
The World Bank has recently slashed global growth forecast by nearly a third to 2.9 percent for this year due to concern of elevated inflation.
Vietnam’s Consumer Price Index (CPI), which measures inflation, in the first five months rose 2.25 percent year-on-year, compared to 1.29 percent in the first five months of last year.
Standard Chartered Bank expects Vietnam’s inflation to be at 4.2 percent this year, slightly higher than the central bank’s cap of 4 percent.
Questions & Answers
Q.What is the proposed new reduction for the environment tax on gasoline?
What is the proposed new reduction for the environment tax on gasoline?
The Ministry of Finance wants to scrap the environment tax on gasoline altogether. This follows a previous approval for a 50 percent reduction to VND2,000 per litre from April.
Q.How will lowering gasoline import prices affect consumer costs?
How will lowering gasoline import prices affect consumer costs?
Lowering gasoline import prices from 20 percent to 12 percent will not bring down gasoline prices for consumers. Instead, it aims to diversify import markets and reduce dependence on specific regions.
Q.How does Vietnam's inflation rate compare to last year's figures?
How does Vietnam's inflation rate compare to last year's figures?
Vietnam's Consumer Price Index rose 2.25 percent year-on-year in the first five months. This is higher than the 1.29 percent recorded during the same period last year.
Q.What is the projected inflation rate for Vietnam this year?
What is the projected inflation rate for Vietnam this year?
Standard Chartered Bank expects Vietnam's inflation to reach 4.2 percent this year. This figure is slightly above the central bank's maximum target of 4 percent.
Reader pulse
Will these tax cuts significantly ease retail costs?
17,489 votes so far