Vietnam proposes drastically increasing ‘environment tax’ on petrol

TUOI TRE NEWS

Updated : 04/05/2017 13:00 GMT + 7

A woman refills her motorbike at a gasoline station in Ho Chi Minh City.
Tuoi Tre
The Vietnamese government is drafting an amendment to the law on environmental protection tax, which includes a proposal to more than double the current tax on gasoline.

The bill, prepared by the Ministry of Finance, suggests lifting the maximum environmental protection tax on gasoline to VND8,000 per liter from the current VND3,000.

Higher tax rates for other fuel products, such as diesel and fuel oil, are also proposed in the draft amendment.

The finance ministry is scheduled to collect feedback for the bill in April and submit a final draft to government in May.

The government will then officially present the bill to the lawmaking National Assembly in June, which will assign various committees to appraise the draft before deciding its fate in October.

The environmental protection tax is intended to solicit resources from the public and increase state revenue in order to resolve environmental issues, according to the finance ministry.

The ministry revealed that revenue from this kind of tax has steadily increased, from VND11,160 billion (US$498.21 million) in 2012 to VND42,393 billion ($1.89 billion) in 2016.

The tax accounted for 1.5 percent to 4.1 percent of the state’s total budget collection, making up 0.3 percent to 0.9 percent of the country’s GDP.

With the tax rate for gasoline likely to more than double later this year, local consumers are worried that fuel prices will soon skyrocket.

A92 gasoline, the country’s most widely used fuel, currently sells for VND17,310 a liter under the VND3,000 environment tax.

Should the new tax rate be applied, the price would rise to more than VND22,000 a liter, according to analysts.

However, Ngo Tri Long, a price management expert, has said that VND8,000 a liter is only the proposed ceiling tax rate for gasoline, and that the finance ministry does not necessarily have to immediately apply it after it is approved.

Even so, the proposed ceiling rate is so high that it will surely impact consumers and the market in general, Long added.

Several regulatory bodies, including the foreign and justice ministries and the Vietnam Chamber of Commerce and Industry have also expressed concerns about the negative impact the new tax rate will have on the economy.

Long therefore suggested that the finance ministry focus on measures to reduce tax losses in the fuel sector, at a time when the state’s budget is suffering huge losses from smuggled fuel.

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This entry was posted in Môi trường - Environment and tagged , by Trần Đình Hoành. Bookmark the permalink.

About Trần Đình Hoành

I am an attorney in the Washington DC area, with a Doctor of Law in the US, attended the master program at the National School of Administration of Việt Nam, and graduated from Sài Gòn University Law School. I aso studied philosophy at the School of Letters in Sài Gòn. I have worked as an anti-trust attorney for Federal Trade Commission and a litigator for a fortune-100 telecom company in Washington DC. I have taught law courses for legal professionals in Việt Nam and still counsel VN government agencies on legal matters. I have founded and managed businesses for me and my family, both law and non-law. I have published many articles on national newspapers and radio stations in Việt Nam. In 1989 I was one of the founding members of US-VN Trade Council, working to re-establish US-VN relationship. Since the early 90's, I have established and managed VNFORUM and VNBIZ forum on VN-related matters; these forums are the subject of a PhD thesis by Dr. Caroline Valverde at UC-Berkeley and her book Transnationalizing Viet Nam. I translate poetry and my translation of "A Request at Đồng Lộc Cemetery" is now engraved on a stone memorial at Đồng Lộc National Shrine in VN. I study and teach the Bible and Buddhism. In 2009 I founded and still manage dotchuoinon.com on positive thinking and two other blogs on Buddhism. In 2015 a group of friends and I founded website CVD - Conversations on Vietnam Development (cvdvn.net). I study the art of leadership with many friends who are religious, business and government leaders from many countries. In October 2011 Phu Nu Publishing House in Hanoi published my book "Positive Thinking to Change Your Life", in Vietnamese (TƯ DUY TÍCH CỰC Thay Đổi Cuộc Sống). In December 2013 Phu Nu Publishing House published my book "10 Core Values for Success". I practice Jiu Jitsu and Tai Chi for health, and play guitar as a hobby, usually accompanying my wife Trần Lê Túy Phượng, aka singer Linh Phượng.

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