The Finance Ministry also explained at Monday’s meeting its proposal to increase the environmental protection tax on petroleum consumption from the current VNĐ1,000-4,000 to VNĐ3,000-8,000 per litre. — Photo vietnamnet.vn

HÀ NỘI — The Finance Ministry explained at Monday’s meeting its proposal to increase the environmental protection tax on petroleum consumption from the current VNĐ1,000-4,000 to VNĐ3,000-8,000 per litre.

The proposal has generated public concern about possible negative impacts on daily life and production.

Phạm Đình Thi, director of the ministry’s Tax Policy Department, said the proposed increase was acceptable.

Petroleum is a product containing chemical substances that pollute the environment on a large scale. Many countries in the world have chosen the petroleum industry to raise taxes, including environmental protection taxes, to fight pollution, Thi said.

He said the proposal aims to prepare for Việt Nam’s deeper integration into the world economy as many international commitments take effect. In the future, the country will have to rely less on import taxes that have to be reduced under several Free Trade Agreements (FTAs) that it is signatory to.

The increase in environmental protection tax would create a foundation to offset decreasing collection from import and export taxes, Thi said, adding that the tax rate should be adjusted in line with socio-economic development requirements in different periods.

Thi said the MoF’s proposal on tax adjustments was also an active response to world oil price fluctuations. He said it aims to ensure the country’s benefits in the context of deeper global integration, and at the same time, avoid big differences in petroleum prices between Việt Nam and neighbouring countries with shared borders.

In fact, Việt Nam’s petrol prices are currently lower than other countries with shared borders, as also members of the ASEAN bloc, he noted.

According to globalpetrolprices.com, on April 3, the retail price of petrol in Việt Nam ranked 44th out of 180 countries. The Philippines ranked 55th, Cambodia, 58th, Thailand, 88th and Laos, 97th, Thi said.

"Given all these factors, the MoF’s proposal to increase the environmental protection tax on petrol is suitable and acceptable," he reiterated. — VNS