Minister says still room for further gasoline tax cuts but could lead to smuggling to other countries

[ASEAN NOW News]

An employee pumps gasoline into a motorbike at a fuel station in Hanoi on March 10, 2022. Photo by VnExpress/Ngoc Thanh

 

Vietnam still has room for further gasoline tax cuts but a lower price tag could enable the smuggling of this commodity to other countries, a minister has said.

 

VN Express reported that the environment tax of VND2,000 ($0.086) per liter could be cut to lower prices, but this will need to be decided by the National Assembly, Minister of Finance Ho Duc Phoc told lawmakers at a meeting Wednesday.

 

The Standing Committee of the National Assembly had already halved the environment tax starting in April, and the remaining halve needs to be voted by lawmakers.

 

Other taxes like special consumption tax, imports tax and value-added tax will also need to be decided by lawmakers.

 

"The Ministry of Finance will evaluate the impact to request further tax cuts from the government and National Assembly," Phoc said.

 

Vietnam’s gasoline price surged to a new historic peak of VND31,570 on June 1, having increased by nearly 36 percent this year.

 

But as the price tag is still lower than other countries like Laos and Thailand, the minister said that further tax cuts could enable the smuggling of gasoline to those countries.

 

The gasoline price rise has pushed up prices of other commodities since earlier this year and raised concerns of inflation among officials.

 

But Phoc said that inflation was under control as the Consumer Price Index in the first five months rose only 2.25 percent year-on-year.

 

Vietnam targets to keep inflation below 4 percent this year.

 

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