Vietnam's taxes on petrol and oil are low: Deputy Minister of Finance

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Deputy Minister of Finance Ta Anh Tuan

Tax policies on petrol and oil is in line with international practices

At the government's regular press conference on the afternoon of June 4, Deputy Minister of Finance Ta Anh Tuan spoke about taxes and fees on petrol and oil prices.

Petrol and oil are subject to import, excise, green and value-added taxes. This is in line with international practices, said the Deputy Minister.

In Vietnam, after the policy on tax reduction is applied, taxes account for 29-31% in petrol prices and 13.3% in diesel oil prices, which are low levels compared to the world average of about 45-60 % (excepting for countries with large oil reserves), said Mr. Ta Anh Tuan

Amid the increase in petrol and oil prices in other countries for the recovery phase after the pandemic and the Russia-Ukraine conflict, those who work as price managers at the Ministry of Finance are also very worried that rising oil prices will affect CPI, which is a big challenge in 2022, the Deputy Minister said.

Regarding green tax, to support airlines to restore their operation in 2021 and 2022, the Government has reduced the green tax by 50% on jet fuel. The Ministry of Finance has also reported to the Government to submit to the National Assembly for approval a Resolution to cut 50-70% of green tax rate on green tax on petrol, oil and grease.

The Ministry of Finance has submitted to the Government a proposal on reducing the preferential import tax rate on petrol and oil from 20% to 12% to diversify sources of petrol and oil.

As for excise tax and value added tax, according to Deputy Minister Ta Anh Tuan, there are no regulations on tax exemption or reduction for goods subject to excise tax. On the other hand, the current excise tax on petrol in Vietnam is also at low level compare the world average.

Three solutions to curb petrol and oil prices

At the press conference, answering questions related to petrol and oil prices, Deputy Minister of Industry and Trade Do Thang Hai admitted that the domestic petrol price has been increasing at a high level. Therefore, the Ministry of Industry and Trade has coordinated with other agencies to implement Decrees 83 and 95, and give amendments to match with the movement of the world petrol and oil prices, help the most people and businesses.

The Deputy Minister Do Thang Hai noted three measures to minimize the increase in petrol and oil prices. Firstly, effectively and flexibly using the Petroleum Price Stabilization Fund to limit rising in domestic petrol and oil prices compared to world price fluctuations, contributing to curbing inflation and supporting the economic recovery.

The average price of a number of world petrol and oil products in the Singapore market from the beginning of the year to June 1, 2022 rose by 45.6-63.68%. However, thanks to the flexible and reasonably use of price stabilization tools, the petrol and oil prices in Vietnam only increased by 27.29-47.89%.

Secondly, it is necessary to adjust taxes and fees on petrol and oil. The Ministry of Industry and Trade has proposed and the Ministry of Finance has also reported to the Government on March 23, 2022 and the National Assembly Standing Committee to issued Resolution 18 on reducing 50% of the green tax on petrol and oil and grease and 70% of green tax on of kerosene from April 1, 2022, effective until the end of this year. In the near future, the Ministry of Industry and Trade will work with other ministries and agencies to review to further reduce taxes related to petrol and oil prices.

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Thirdly, it is necessary to design social welfare policies and measures to support people, especially the poor, policy households and businesses. This is responsibility not only for Ministry of Industry of Trade and Ministry of Finance but Government, other ministries and agencies, said the Deputy Minister of Industry and Trade Do Thang Hai.