Legislators okay environmental tax cuts for fuel amid rising price

Vietnam's National Assembly adopted on Wednesday lowered environmental tax on fuel, applied from July 11 till the year-end, amidst increasing oil prices that put pressure on inflation.

Per this approval, the NA Standing Committee cut the environmental tax rate from VND2,000 VND ($0.09) to VND1,000 per liter for gasoline (except ethanol), from VND1,000 to VND500 for diesel, from VND1,000 to VND300 for mazut and lubricant, and grease. However, the tax for kerosene remains unchanged at VN300 per liter.

The tax cuts - the second time in the year after the first this April - are expected to help the Vietnamese economy better navigate a global situation in which oil prices have soared.

Not just the tax cuts, NA Chairman Vuong Dinh Hue asked the government to adjust the country’s Most Favored Nation (MFN) regulations to diversify its sources of gasoline imports and reduce reliance on its key suppliers, including South Korea and Southeast Asia neighbors.

Under free trade agreements within the Association of Southeast Asian Nations (Asean) and between Vietnam and South Korea, the import tariff on gasoline is about 8%.