Proposal to further reduce environmental taxes on gasoline by the end of 2025

The policy of reducing environmental protection taxes on gasoline and oil will be applied from April 2022. Currently, this tax rate is still reduced by 50%, equivalent to 2,000 VND per liter of gasoline (except ethanol) and 1,000 VND per liter of oil. diesel. This policy expires at the end of this year, resulting in the environmental protection tax on gasoline returning to the ceiling level from the beginning of next year.

To ensure stable growth goals, the Ministry of Finance proposes to extend this policy until the end of next year. This is to contribute to stabilizing domestic gasoline prices and curbing increases in consumer prices – CPI.

Accordingly, the plan to reduce environmental protection taxes in 2025 proposed by the Ministry of Finance is similar to the current policy. Specifically, the environmental protection tax on gasoline, except ethanol, is expected to still be 2,000 VND per liter in 2025; Jet fuel, diesel oil, fuel oil, and lubricant oil are 1,000 VND per liter; grease 1,000 VND per kg; kerosene 600 dong per liter.

From 2026, the environmental protection tax is expected to return to the ceiling, according to regulations: gasoline (except ethanol) is 4,000 VND per liter; Flight fuel is 3,000 VND per liter; Diesel oil, fuel oil, and lubricant oil are 2,000 VND per liter; kerosene 1,000 VND per liter; Grease is 2,000 VND per kg.

The Ministry of Finance said that the recent policy of reducing environmental taxes on gasoline has controlled inflation and stabilized the macroeconomy. Because this tax rate adjustment will directly impact the domestic retail price of gasoline. Therefore, this is also considered a tool to control inflation.

According to authorities, maintaining the tax reduction policy in 2024 has helped keep gasoline prices stable even though world prices sometimes increased sharply. As of October 31, gasoline and oil have gone through 44 price management periods, including 23 sessions of decrease, 18 sessions of increase and 3 sessions of alternating increases and decreases. “Currently, gasoline prices have been pulled to a lower level than at the end of 2023,” the Ministry of Finance informed.

With the consumption of gasoline, oil, and lubricants in 2025 equivalent to this year, the Ministry of Finance estimates that the total state budget revenue reduction will be about 44,224 billion VND (including more than 40,204 billion VND in environmental protection tax reduction and more than 4,020 billion VND in reduced environmental protection taxes). value added tax (VAT).

Previously, the reduction in budget revenue in 2023 was about more than 34,473 billion VND. In the first 9 months of 2024 alone, the reduction is estimated at about VND 28,900 billion (not including reduction in VAT collection).

Reducing budget revenue, but the Ministry of Finance assesses that this will be a direct support from the State to help people and businesses recover, develop production, business, and socio-economic development.