Vietnam approves 2nd environmental tax cut on fuel
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Vietnamese lawmakers have approved the second environmental tax cut on gasoline starting next week to contain surging fuel prices, two months after the first reduction came into effect.
In an extraordinary meeting Wednesday morning, the Standing Committee of the National Assembly greenlighted an additional 25 percent cut on environmental tax to bring it down to VND1,000 ($0.04) per liter from July 11 until the end of the year.
The tax was originally VND4,000 per liter and was cut to VND2,000 in April this year.
Starting next week the environmental tax on diesel will also be cut from VND1,000 per liter to VND500.
The government initially proposed lawmakers to approve the cut starting Aug. 1, but Vuong Dinh Hue, chairman of the National Assembly, said Wednesday it should come into effect starting next week.
He added that the government should consider bringing down value-added tax and special consumption tax on fuel to reduce the impact of rising fuel prices on inflation.
The government estimates that the latest environmental tax break would bring the consumer price index this year down by around 0.15 percentage points.
RON95 gasoline price has risen 41 percent to VND32,760 this year.
Questions & Answers
Q.What is the new environmental tax rate for gasoline after this second cut?
What is the new environmental tax rate for gasoline after this second cut?
The environmental tax on gasoline will be reduced to VND1,000 ($0.04) per litre. This is an additional 25 percent cut, effective from July 11 until the end of the year.
Q.How much has the RON95 gasoline price increased this year before this latest tax cut?
How much has the RON95 gasoline price increased this year before this latest tax cut?
RON95 gasoline price has risen by 41 percent this year. It currently stands at VND32,760, as mentioned in the article.
Q.When does this second environmental tax cut on fuel come into effect?
When does this second environmental tax cut on fuel come into effect?
The second environmental tax cut on fuel is scheduled to come into effect starting next week, from July 11. This was decided at an extraordinary meeting on Wednesday morning.
Q.What other tax reductions might the government consider to tackle rising fuel prices?
What other tax reductions might the government consider to tackle rising fuel prices?
The government should consider bringing down value-added tax and special consumption tax on fuel. This suggestion came from Vuong Dinh Hue, chairman of the National Assembly.