Vietnam jet fuel tax cut to continue through 2021
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Lawmakers have decided to continue the 30-percent cut in environment tax on jet fuel through next year to support the aviation industry.
It will remain at VND2,100 (9.1 U.S. cents) per liter until the end of next year before returning to VND3,000 in 2022, the National Assembly Standing Committee decided on Thursday.
Deputies had originally approved the cut from August until the end of this year.
The government’s loss of revenues is estimated at VND360-400 billion this year, but it expects the tax break to reduce airlines’ costs and help them recover from the crisis caused by the Covid-19 pandemic.
Airlines have gone through major difficulties due to travel restrictions and limited international flights.
Vietnam Airlines forecasts a loss of VND14.8 trillion this year, while for budget carrier Vietjet it is likely to be VND3 trillion.
The aviation industry served 29.4 million passengers in the first 11 months, down 41.7 percent year-on-year, according to the General Statistics Office.
Questions & Answers
Q.What was the previous duration approved for the jet fuel tax cut?
What was the previous duration approved for the jet fuel tax cut?
Deputies had originally approved the 30-percent cut in environment tax on jet fuel to be effective from August until the end of this year. This initial approval has now been extended through 2021.
Q.What is the estimated revenue loss for the government due to the tax cut this year?
What is the estimated revenue loss for the government due to the tax cut this year?
The government estimates a loss of revenues between VND360 billion and VND400 billion this year because of the jet fuel tax reduction. This measure aims to help the aviation industry recover.
Q.How many passengers did the aviation industry serve in the first 11 months of this year?
How many passengers did the aviation industry serve in the first 11 months of this year?
According to the General Statistics Office, the aviation industry served 29.4 million passengers in the first 11 months of this year. This figure represents a 41.7 percent decrease compared to the same period last year.
Q.What impact is the tax break expected to have on airlines?
What impact is the tax break expected to have on airlines?
The tax break is expected to reduce airlines' operating costs and help them recover from the crisis caused by the Covid-19 pandemic. Airlines have faced significant challenges due to travel restrictions and limited flights.
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