Vietnam has raised the environmental protection tax on a number of petroleum products beginning 1 May.
The Ministry of Finance said that the purpose is to encourage the production and consumption of clean energy. However, by lowering the import duties on these products at the same time the effect on retail prices will be nil.
“The use of revenue from environmental protection taxes will be based on the current regulations for the state budget,” said Pham Dinh Thi, head of the Tax Policy Department.
The environmental protection tax on jet fuel will increase from USD 0.046 to USD 0.138 per litre, on diesel fuel from US 0.23 to US 0.69 per litre, and on mazut from USD 0.014 to USD 0.042 per litre.
The tax on kerosene will remain at USD 0.014 per litre,
The state budget will collect an additional USD 501.69 million by boosting the environmental protection tax.
Meanwhile, the import taxes on gasoline (RON 92 and RON 95) and kerosene will be reduced from 35% to 20%; on diesel fuel from 35% to 20%; mazut, from 35% to 25%; and, jet fuel from 25% to 10%.
These cuts will reduce tax collection by USD 602.16 million.