The Ministry of Finance has proposed cutting the environmental protection tax on fuel products by 50% in a bid to curb inflation by lowering retail fuel prices.
The proposal is included in a draft resolution to be submitted by the Govovernment to the National Assembly Standing Committee.
Under the plan, the tax on petrol (excluding ethanol) and aviation fuel would be reduced from VND2,000 ($0.076) per litre to VND1,000 per litre. The tax on diesel would also be halved, from VND1,000 to VND500 per litre.
The revised rates would apply throughout the implementation period, including any extension if deemed necessary.
According to the ministry, the environmental protection tax currently accounts for about 6.7% of the base price of fuel products.
The proposed cuts are estimated to reduce State budget revenues by approximately VND1.79 trillion ($68 million) per month, including a decline in value-added tax collections.
However, the ministry said the measure is necessary to ease input costs, support businesses and households, and stimulate production and business activities.
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