MoF retables raising environmental protection tax on petrol
The Ministry of Finance (MoF) is going ahead with its proposal to increase the environmental protection tax on fuel consumption.
The Ministry says the reason behind the move is the “decreasing fuel import tax.” MoF explains that Vietnam is scheduled to cut the preferential import tax on fuel following its free trade agreement commitments, which would continuously trim the state budget revenue in the years ahead. The taxes on importing petrol and oil are currently 20 and 7%. Under Vietnam’s commitments under its recent free trade agreements, the country would gradually ease the preferential tax on petrol to 10% and that of oil to 0%.
Particularly, the revenue from fuel import tax on products from the ASEAN and China in 2016 reached VND5,800 billion (down 57% on-year) and VND898,000 billion (down 76%), respectively.
Last year, the State’s revenue from fuel import tax from these two markets kept plunging. For instance, revenue from the ASEAN decreased by 97% against 2016.
In this context, MoF claims the environmental protection tax hike is a measure to broaden and diversify state budget sources.
Notably, under the latest MoF draft on environmental protection taxes, the tax on petroleum would be raised to VND4,000 per liter. The hike would be VND2,000 per liter for diesel and VND2,000 per kg for mazut and lubricant. Hence, if applied, the hike would raise more than VND15,700 billion per year for the state budget.
Meanwhile, the global price of crude oil is on a downward trend and would restrict State budgetary sources in the short term. Besides, retail pump prices in Vietnam are lower than in neighboring countries, including the ASEAN and Asian nations, stated the Ministry.
A ranking by Global Petrol Prices released on November 27, 2017 found that Vietnam’s retail pump price (VND18,580 per liter) took the 45th position among 166 countries in the list (lower than 122 countries) and was lower than three neighboring countries (lower than Laos by VND5,304 per liter, Cambodia by VND2,988 per liter, and China by VND1,650 per liter).
As noted by MoF, fuel contains pollutant substances such as lead, sulfur, benzene, hydrocarbon, and a number of additives. Hence, it is necessary to raise the green tax on it to draw oganizations and individuals’ attention to environmental issues and encourage them to produce and use alternative bio-fuel, such as E5.
Earlier in 2017, MoF mentioned hiking the environmental protection tax on petroleum to VND8,000 in its draft Law on Environmental Protection Taxes, sending the public and economic observers into a frenzy of debate.
The draft is scheduled to be submitted to the Finance-State Budget Committee of the National Assembly (NA) for consideration. If things go well, the new tax legislation would come into force in July.
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Particularly, the revenue from fuel import tax on products from the ASEAN and China in 2016 reached VND5,800 billion (down 57% on-year) and VND898,000 billion (down 76%), respectively.
Last year, the State’s revenue from fuel import tax from these two markets kept plunging. For instance, revenue from the ASEAN decreased by 97% against 2016.
In this context, MoF claims the environmental protection tax hike is a measure to broaden and diversify state budget sources.
Notably, under the latest MoF draft on environmental protection taxes, the tax on petroleum would be raised to VND4,000 per liter. The hike would be VND2,000 per liter for diesel and VND2,000 per kg for mazut and lubricant. Hence, if applied, the hike would raise more than VND15,700 billion per year for the state budget.
Meanwhile, the global price of crude oil is on a downward trend and would restrict State budgetary sources in the short term. Besides, retail pump prices in Vietnam are lower than in neighboring countries, including the ASEAN and Asian nations, stated the Ministry.
A ranking by Global Petrol Prices released on November 27, 2017 found that Vietnam’s retail pump price (VND18,580 per liter) took the 45th position among 166 countries in the list (lower than 122 countries) and was lower than three neighboring countries (lower than Laos by VND5,304 per liter, Cambodia by VND2,988 per liter, and China by VND1,650 per liter).
As noted by MoF, fuel contains pollutant substances such as lead, sulfur, benzene, hydrocarbon, and a number of additives. Hence, it is necessary to raise the green tax on it to draw oganizations and individuals’ attention to environmental issues and encourage them to produce and use alternative bio-fuel, such as E5.
Earlier in 2017, MoF mentioned hiking the environmental protection tax on petroleum to VND8,000 in its draft Law on Environmental Protection Taxes, sending the public and economic observers into a frenzy of debate.
The draft is scheduled to be submitted to the Finance-State Budget Committee of the National Assembly (NA) for consideration. If things go well, the new tax legislation would come into force in July.
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