Ministry of Finance submits plan to sharply reduce environmental protection tax on gasoline

The Ministry of Finance has just sent the Ministry of Justice for appraisal the Draft Resolution of the National Assembly Standing Committee on environmental protection tax rates on gasoline, oil and grease in 2024.

In the submission, 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.

gasoline 2.jpg — According to the new plan of the Ministry of Finance, environmental protection tax on petroleum products will decrease sharply.

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.

If the environmental protection tax on gasoline continues to be reduced for 2024, the retail price of these items will decrease compared to the implementation of the environmental protection tax rate prescribed in Resolution No. 579. This calculation is based on the assumption that other factors constituting the base price of gasoline remain unchanged compared to the most recent management period.

Accordingly, the retail price of gasoline (including VAT reduction) decreased by VND2,200/liter; jet fuel decreased by VND2,200/liter; diesel, fuel oil, and lubricants decreased by VND1,100/liter; grease decreased by VND1,100/kg; and kerosene decreased by VND440/liter.

The report also stated that with the expected consumption of gasoline, oil, and grease in 2024 being equivalent to that of 2023 and with the environmental protection tax rate as proposed above, it is expected that environmental protection tax revenue will decrease by about VND 38,929 billion and total state budget revenue (including VAT reduction) will decrease by about VND 42,822 billion.

From January 1, 2025, the environmental protection tax rate on gasoline, oil, and grease will be implemented according to Resolution No. 579 of the National Assembly Standing Committee.