Proposal extending 50% green tax cut for fuel products in 2025

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Total state budget revenue (including VAT reduction) will decrease by about VND 44,224 billion under the policy of 50% green tax cut for fuel products (except ethanol). Photo: Internet

According to the draft report of the National Assembly Standing Committee on green tax rates for gasoline and oil, the Ministry of Finance said that, according to the provisions of Resolution No. 42/2024/UBTVQH15, from January 1, 2025, the green tax rate on gasoline, oil, and lubricants will return to the ceiling level in the Tax Schedule issued with the Law on Green Tax, except for kerosene.

This will increase domestic retail prices, as gasoline and oil are a component of the base price.

Calculations by the Ministry of Finance show that, assuming that other factors constituting the base price of gasoline and oil remain, this will increase the retail price of gasoline, oil, and lubricants (including VAT) by VND2,200/liter for gasoline; VND2,200/liter for jet fuel; VND1,100/liter for diesel, fuel oil, and lubricants; VND440/liter for kerosene y; and VND1,100/kg for grease

According to the Ministry of Finance, in 2025, the context of the world economic situation as well as the domestic economy still has many potential factors that adversely affect the completion of the goals of growth and macroeconomic stability.

Therefore, the Ministry of Finance submitted to the Government to propose to the National Assembly Standing Committee to issue a Resolution on the green tax rate for gasoline, oil, and grease applicable in 2025 as prescribed in Resolution No. 42/2023/UBTVQH15.

Specifically, the green tax rate for gasoline, excluding ethanol, decreased from VND4,000 to VND2,000/liter (a 50% decrease); aviation fuel decreased from VND3,000 to VND1,000/liter; (nearly a 70% decrease); diesel, fuel oil, and lubricants reduced to VND1,000/liter (down 50%); grease reduced to VND1,000/kg (down 50%); kerosene reduced to VND600/liter (down 40%).

To ensure continuity and timeliness, the Ministry of Finance proposes that the Resolution take effect from January 1, 2025 to December 31, 2025.

From January 1, 2026, the green tax rate for these items will be implemented according to Resolution No. 579/2018/UBTVQH14.

Regarding the impact of the policy, the drafting agency said that the retail price of gasoline (excluding ethanol) will decrease by VND2,200/liter; aviation fuel will decrease by VND2,200/liter; diesel oil, fuel oil, and lubricants will have their retail prices reduced by VND1,100/liter; grease retail prices will be reduced by VND1,100/kg; kerosene retail prices will be reduced by VND440/liter (this price reduction includes VAT reduction).

Regarding the impact on state budget revenue, the Ministry of Finance said that with the expected consumption of gasoline, oil, and lubricants in 2025 being equivalent to 2024, green tax revenue in 2025 will decrease by about VND40,204 billion and total state budget revenue (including VAT reduction) will decrease by about VND44,224 billion.