Deputy Minister of Finance: Reducing environmental protection tax on petroleum leading to a decrease of more than VND32,500 billion in budget revenue

Deputy Minister of Finance Nguyen Duc Chi. Photo: VGP

At the regular Government press conference on the afternoon of July 4, in response to the questions about the petroleum tax reduction, Deputy Minister of Finance Nguyen Duc Chi said that petroleum prices have a strong impact on the lives of people and business activities. Therefore, on July 4, after being approved by the Government, the Finance Minister signed a report to the Standing Committee of the National Assembly on adjusting and reducing the environmental protection tax rate on petroleum in 2022.

Accordingly, this tax on petroleum will be reduced from VND2,000 to a floor level of VND1,000/liter. Other oils and grease are reduced by VND300-700 /liter. Particularly, the tax rate for kerosene remains at VND 300/liter because this is the price floor in the tax bracket.

The Deputy Finance Minister said that the ministry has reported to the Government and has agreed to submit it to the Standing Committee of the National Assembly for issuing a decision as soon as possible based on the authority of this agency. The authority of the Standing Committee of the National Assembly can only decide at the floor level.

Deputy Minister Nguyen Duc Chi said that with the consumption volume in a month when this Resolution is applied from August 1, it is estimated that the budget revenue would be reduced by VND7,000 billion due to the environmental protection tax reduction, plus the implementation of two resolutions to reduce tax on petrol and oil from the beginning of the year, reducing revenue by VND25,538 billion. Thus, when implementing all solutions, the State budget would be estimated to fall by VND32,538 billion in 2022.

Regarding the increase of revenues from petroleum imports, the Deputy Minister of Finance said that with the expected amount of petroleum according to the report, the increase in budget revenue from imported petroleum in 2022 would be about VND9,100 billion.

"Meanwhile, the policy of reducing environmental protection tax for petroleum products will result in a decrease of budget revenue by VND32,500 billion," Deputy Minister Nguyen Duc Chi stated.

In the long run, a representative of the Ministry of Finance said that the Ministry would continue to propose to reduce the excise tax on petroleum and value-added tax on gasoline.

The Ministry of Finance is also studying and reporting to the competent authorities based on the actual movements of petroleum prices in the world and the movements of petrol prices in Vietnam from now to the end of the year to report to the competent authorities. From that, taking appropriate actions or policies to stabilize petroleum prices in the country and support socio-economic development for the whole country.

At an online conference of the Government with localities on the same day, Prime Minister Pham Minh Chinh directed to prioritize the use of fiscal policy, and implement a reasonable expansionary fiscal policy to ensure efficiencies such as fees, taxes, charges, and increased public investment. At the same time, actively reporting and proposing to competent authorities to adjust taxes on petrol and oil. Furthermore, researching and applying cautiously the support policies on petroleum for a number of subjects.

In general, from the beginning of the year until now, petroleum prices have had 17 adjustments, of which four times of decrease and 13 times of increase. The price of RON 95-III is at VND32,760 VND/liter, the price of gasoline E5 RON 92 is currently VND30,890/liter, an increase of over VND7,700; and diesel also increased to VND29,610/liter.