The Government has just submitted a document to the National Assembly Standing Committee, proposing to extend the environmental protection tax reduction policy on gasoline and oil until the end of 2024. The tax reduction is equivalent to 50% of the tax bracket and is being applied from April 2022.
Accordingly, in 2024, the environmental protection tax rate applied to gasoline (except ethanol) is 2,000 VND per liter; for jet fuel, diesel, fuel oil, and lubricants is 1,000 VND per liter; for kerosene is 600 VND per liter.
According to calculations, when this tax is reduced, the price of gasoline and oil to consumers will decrease by 1,100-2,200 VND per liter (including VAT), and kerosene alone will decrease by 660 VND per liter.
From January 1, 2025, the environmental protection tax on gasoline, oil, and grease will return to the ceiling level in the tax bracket, which is VND 4,000 per liter for gasoline (except ethanol); and VND 3,000 per liter for aviation fuel.
Assessing the impact of tax reduction, the Government said the state budget is estimated to reduce revenue by about VND38,924 billion. In total, the reduction of value-added tax (VAT) in the first half of 2024 will reduce the budget revenue by more than VND42,450 billion.
However, according to the Government, extending the reduction of environmental protection tax on gasoline and oil until the end of next year will help reduce domestic retail prices, thereby directly contributing to reducing people's costs, production costs, and product prices.
This tax reduction also helps businesses increase their resilience, especially businesses that benefit from tax reduction on gasoline and oil such as transportation, gas services, and fishing.
Previously, in the submission sent to the Ministry of Justice for appraisal of the Draft Resolution of the National Assembly Standing Committee on environmental protection tax rates for gasoline and lubricants in 2024, the Ministry of Finance proposed to continue reducing environmental protection tax on gasoline in 2024.
Specifically, the environmental protection tax on gasoline (except ethanol) remains at VND2,000/liter; jet fuel, diesel, fuel oil, and lubricants VND1,000/liter; grease VND1,000/kg; and kerosene VND600/liter.
According to this agency, if the environmental protection tax is not reduced, from January 1, 2024, the environmental protection tax on gasoline will increase again to VND 4,000/liter; jet fuel VND 3,000/liter; diesel oil, fuel oil, lubricants VND 2,000/liter; kerosene VND 1,000/liter (ceiling level is VND 2,000/liter)...
The Ministry of Finance believes that if the environmental protection tax on gasoline, oil, and grease increases to the ceiling from January 1, 2024, it will have a certain impact on people's psychology and daily life as well as production and business activities of enterprises. This will affect inflation and directly impact macroeconomic stability, especially in the context of the country's economy still facing many difficulties and potential risks.
"Therefore, it is necessary to have solutions to contribute to stabilizing gasoline prices and stabilizing the macro economy in 2024," the Ministry of Finance emphasized.
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