According to the Government 's proposal, the environmental protection tax on gasoline will be reduced by 50%, equivalent to the tax bracket currently in effect from April 2022. Specifically, for gasoline (except ethanol), it is VND2,000/liter. Jet fuel, diesel, fuel oil, and lubricants are VND1,000/liter, and kerosene is VND600/liter.
The Government proposes to extend the policy of reducing 50% of environmental protection tax on gasoline until the end of 2024.
Gasoline and oil prices will decrease by 1,100 - 2,200 VND/liter (including VAT), while kerosene will decrease by 600 VND/liter.
From January 1, 2025, the environmental protection tax on gasoline, oil, and lubricants will return to the ceiling level in the tax bracket, equivalent to VND 4,000/liter for gasoline (except ethanol); VND 3,000/liter for jet fuel; VND 2,000/liter for diesel, fuel oil, and lubricants; VND 1,000/liter for kerosene...
The Government also said that it will continue to closely monitor developments in world oil prices. In case fluctuations in oil prices affect the implementation of economic development goals, the Government will direct relevant ministries and branches to study and propose to the National Assembly Standing Committee a plan to adjust environmental protection tax on oil.
Assessing the impact of tax reduction, the Government said that the state budget is estimated to reduce revenue by about VND 38,593 billion. In total, the reduction of value-added tax (VAT) in the first half of 2024 will reduce the budget revenue by more than VND 42,450 billion.
However, the advantage of extending the reduction of environmental protection tax on gasoline 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.
According to the General Statistics Office, if the environmental protection tax on gasoline, oil, and grease increases to the upper level of the tax bracket from the beginning of 2024, the average CPI will increase by 0.36 - 0.54 percentage points. On the contrary, if this tax is continued to be reduced until the end of next year, fluctuations in retail prices of gasoline and oil will be avoided and the CPI will not increase.
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, when evaluating this proposal, the Ministry of Justice requested the Ministry of Finance - the drafting agency, to coordinate with the Ministry of Industry and Trade to supplement the assessment of supply and demand, domestic and world gasoline prices to propose a suitable application time.
The Ministry of Finance said that gasoline prices often fluctuate rapidly in a short period of time and domestic prices depend on the world. Meanwhile, reducing environmental protection tax is a temporary solution, applied in the context of fluctuating gasoline prices, negatively affecting the economy. Therefore, this policy is only applicable for a certain period of time, so the proposal to extend this tax reduction on gasoline, oil and grease until the end of 2024 is appropriate.
The reduction in environmental protection tax on gasoline and oil is being applied from April 1, 2022 until the end of this year. Currently, this tax rate is still reduced by 50%, equivalent to VND 2,000/liter of gasoline (excluding ethanol) and VND 1,000/liter of diesel.
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