The Ministry of Finance has proposed cutting environmental protection tax on gasoline by half, jet fuel by 70% and kerosene by 40% by the end of next year.
The policy of reducing environmental protection tax on gasoline and oil will be applied from April 2022. Currently, this tax rate is still reduced by 50%, equivalent to VND 2,000 per liter of gasoline (excluding ethanol) and VND 1,000 per liter of diesel. This policy will expire at the end of this year, causing the environmental protection tax on gasoline and oil to return to the ceiling level from the beginning of next year.
To ensure stable growth, the Ministry of Finance proposed extending this policy until the end of next year. This is to help stabilize domestic gasoline prices and curb consumer price inflation - CPI.
Accordingly, the plan to reduce environmental protection tax in 2025 proposed by the Ministry of Finance is similar to the current policy. Specifically, the environmental protection tax on gasoline, excluding ethanol, is expected to remain at VND2,000 per liter in 2025; jet fuel, diesel, fuel oil, and lubricants at VND1,000 per liter; grease at VND1,000 per kilogram; and kerosene at VND600 per liter.
From 2026, environmental protection tax is expected to return to the ceiling level, according to regulations: gasoline (except ethanol) is 4,000 VND per liter; jet fuel is 3,000 VND per liter; diesel, fuel oil, lubricants are 2,000 VND per liter; kerosene is 1,000 VND per liter; grease is 2,000 VND per kilogram.
The Ministry of Finance said that the recent policy of reducing environmental tax on gasoline and oil helps control inflation and stabilize the macro-economy. Because adjusting this tax rate will directly affect the retail price of gasoline and oil in the country. Therefore, this is also considered a tool to control inflation.
According to authorities, maintaining the tax reduction policy in 2024 has helped keep gasoline prices stable despite sharp increases in world prices. As of October 31, gasoline prices have gone through 44 price adjustments, including 23 decreases, 18 increases, and 3 alternating increases and decreases. "Currently, gasoline prices have been pulled back to a lower level than at the end of 2023," the Ministry of Finance informed.
With the consumption of gasoline, oil, and lubricants in 2025 being equivalent to this year, the Ministry of Finance estimates that the total state budget revenue will decrease by about VND 44,224 billion (including more than VND 40,204 billion in environmental protection tax reduction and more than VND 4,020 billion in value added tax - VAT).
Previously, the budget revenue reduction in 2023 was about 34,473 billion VND. In the first 9 months of 2024 alone, the estimated reduction is about 28,900 billion VND (excluding VAT reduction).
Although the budget revenue has decreased, the Ministry of Finance assessed that this will be direct support from the State to help people and businesses recover, develop production, business, and develop the socio-economy.
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