In the comments sent to the Ministry of Finance, the Vietnam Chamber of Commerce and Industry (VCCI) stated that, xăng is not a luxury item, so the imposition of Special Consumption Tax on this item is also a measure to protect the environment. Therefore, they requested the drafting agency to study the possibility of abolishing this tax on domestic fuel.
Similarly, the Ministry of Agriculture and Rural Development stated that the consumption of biofuels (E5 and E10) has not yet replaced conventional gasoline due to consumer habits and the advantages of this type of fuel, therefore, the replacement of conventional gasoline needs a roadmap.
Therefore, the Ministry of Agriculture and Rural Development requested consideration of reducing Special Consumption Tax on conventional gasoline but may consider increasing the environmental protection tax rate to be consistent with the tax objective.
However, in the draft amendment to the Special Consumption Tax Law (amended) sent by the Ministry of Finance to the Ministry of Justice for review, the Ministry of Finance explained that the implementation of the adjustment of the Special Consumption Tax rate falls within the authority of the National Assembly and must be submitted to the National Assembly for consideration and decision.
The Ministry also noted that gasoline is a fossil fuel, not renewable, and must be used economically, so most countries impose Special Consumption Tax on this item, such as France, Germany, Italy, the UK, South Korea, Australia, Thailand, Singapore, China, Cambodia, and Laos...
In Vietnam, gasoline is subject to Special Consumption Tax from 1995.
"This regulation is consistent with the objectives of Special Consumption Tax and consistent with international practices. In addition, in the context of environmental pollution and climate change, which are global issues, the commitment of the Vietnamese government to achieving a net-zero emissions target by 2050, along with other solutions, the imposition of Special Consumption Tax on gasoline as currently applicable is appropriate, contributing to reducing emissions," the Ministry of Finance explained.
Earlier, in an interview with Lao Động, experts also did not support the abolition of Special Consumption Tax on gasoline.
In an interview with Lao Động, Dr. Nguyễn Minh Phong - former Head of the Economic Research Department, Institute of Economic and Social Development Research, Hanoi, said that careful consideration should be given to the proposal to abolish Special Consumption Tax on gasoline, as the essence of Special Consumption Tax is to guide consumption, contributing to limiting the use of non-renewable fuels.
"If Special Consumption Tax on gasoline is abolished, the price of gasoline may decrease slightly, but it will not have a comprehensive impact on the price of gasoline, as the current price of gasoline is linked to the world market and subject to the impact of the world market. If Special Consumption Tax on gasoline is abolished, people will use gasoline recklessly, causing environmental pollution, and the state budget will also be reduced.
Therefore, I believe that careful consideration and evaluation of the two-sided impact are necessary, in general, I believe that it is not necessary to abolish it in the current context," Dr. Nguyễn Minh Phong said.
Currently, the Special Consumption Tax rate applicable to gasoline is 10%, E5 gasoline is 8%, and E10 gasoline is 7%; diesel fuel is not subject to this tax. RON 95-III gasoline is currently priced at 22,880 VND, diesel fuel at 20,320 VND. Therefore, in each liter of gasoline, there is more than 2,000 VND in Special Consumption Tax (before VAT).
