A worker at a fuel station in Hoàn Kiếm District, Hà Nội. — VNA/VNS Photo

HÀ NỘI — The National Assembly Standing Committee has issued a resolution on Việt Nam’s environmental protection tax rates for petrol, oil, and lubricants in 2025, keeping in effect a tax cut introduced to support the economy post pandemic.

The tax cut, which was set to expire on January 1, 2025, is to continue for another year until December 31.

Previously, environmental tax rates in Việt Nam were set at VNĐ4,000 per litre for petrol (excluding ethanol), VNĐ3,000 per litre for jet fuel, VNĐ2,000 per litre for diesel, VNĐ1,000 per litre for kerosene, VNĐ2,000 per litre for mazut oil, VNĐ2,000 per litre for lubricating oil and VNĐ2,000 per kilogramme for lubricating grease.

During a recent meeting with the committee, Minister of Finance Nguyễn Văn Thắng warned that removing the tax cut could negatively affect the economy. Higher environmental taxes on petrol, oil, and lubricants may increase retail prices, exerting upward inflation pressure and potentially hindering economic growth targets.

The Government, therefore, proposed that the tax be reduced for another year at VNĐ2,000 per litre for petrol (excluding ethanol), VNĐ600 per litre for kerosene, VNĐ1,000 per litre for jet fuel, diesel, mazut oil, and lubricating oil and grease to help control inflation, ensure macro-economic stability, and ease difficulties for businesses and the public.

Chairman of the NA’s Finance and Budget Committee Lê Quang Mạnh said the vast majority of the committee members supported the tax cut for another year. The NA, however, advised the Government to take additional measures to ensure that the proposed tax reductions do not affect the Government’s budget revenue and expenditure estimates for 2025, previously approved by the NA.

Chairman of the NA’s Law Committee Hoàng Thanh Tùng said that the Government should conduct studies and review current policies and assess their impacts to determine whether the reduced tax rates can continue in 2026. Removing the tax cut should be done carefully and gradually, giving businesses and the public time to adjust.

NA Chairman Trần Thanh Mẫn proposed that the Government consider a gradual tax increase schedule to eventually apply the rates specified in Resolution 579/2018/UBTVQH14. He stressed the need for the tax rates to align with the principles of environmental protection taxes, reflect global crude oil price trends and fulfil Việt Nam’s international commitments to environmental protection and fighting climate change.

NA Deputy Chairwoman Nguyễn Thị Thanh said additional efforts are needed to improve the Government‘s policy forecasting and implementation. During the meeting, participating members of the Standing Committee unanimously approved the tax cut. — VNS