The policy of preferential import tax reduction, environmental protection tax and VAT on gasoline continues to be applied until the end of this year, instead of ending on September 30.
On September 30, the Government issued Resolution 43 on extending the tax exemption period for gasoline and oil. Accordingly, taxes on petroleum including most favored nation (MFN) imports, environmental protection tax, and value added tax (VAT) continue to be reduced to zero for another 3 months, i.e. until the end of this year.
Particularly, special consumption tax on gasoline is still applied according to the Law on Special Consumption Tax and guiding documents. According to the current applicable rate, mineral gasoline is taxed at 10%, E5 at 8% and E10 at 7%.
Previously, this policy only lasted until the end of September, in response to the complicated developments of the Middle East conflict.
The Government’s move to further reduce gasoline taxes was made in the context that world oil prices are still complicated and the energy market still has potential risks due to the impact of the Middle East conflict.
This option is said to help balance the goals of controlling inflation, ensuring energy supply and gradually restoring budget revenue. At the same time, maintaining 0% MFN tax also creates conditions for key businesses to diversify their supply sources outside of ASEAN, reducing dependence on some traditional markets.
Also according to the Resolution, if necessary, the Ministry of Industry and Trade will together with the Ministry of Finance propose and submit to the Government to adjust the application time to suit petroleum market developments and macroeconomic management requirements.