The Ministry of Finance proposes to continue reducing environmental protection tax on gasoline and oil by 50%

On October 13, the Ministry of Finance sent Official Dispatch No. 11275/BTC-CST to ministries, branches, People’s Committees of provinces and cities and the Vietnam Federation of Commerce and Industry to collect comments on the Resolution project on insurance tax rates . Environmental protection (environmental protection) for gasoline, oil, and grease. Accordingly, the Ministry of Finance proposes to continue reducing environmental protection tax on gasoline, oil and lubricants by 50% in 2024.

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The reduction is similar to 2023

Accordingly, the Ministry of Finance submits to the Government to submit to the Standing Committee of the National Assembly (UBTVQH) to promulgate a Resolution on environmental protection tax rates for gasoline, oil, and lubricants to apply in 2024 as the tax rate specified in the Resolution. No. 30/2022/UBTVQH15 of UBTVQH.

Specifically as follows: Gasoline, except ethanol: 2,000 VND/liter. Aviation fuel, diesel oil, fuel oil, lubricant oil: 1,000 VND/liter. Grease: 1,000 VND/kg. Kerosene: 600 VND/liter.

From January 1, 2025, the environmental protection tax rate on gasoline, oil, and lubricants will comply with Resolution No. 579/2018/UBTVQH14 of the UBTVQH (gasoline, except ethanol, is 4,000 VND/liter; aviation fuel is 3,000 VND/liter). liter; diesel oil, fuel oil, lubricant oil is 2,000 VND/liter; kerosene is 1,000 VND/liter; grease is 2,000 VND/kg).

To ensure continuity and timeliness, the Ministry of Finance proposes that the Resolution take effect from January 1, 2024.

The Ministry of Finance said that in the coming time, the Ministry of Finance will continue to closely monitor developments in world gasoline prices and in case gasoline price fluctuations affect the implementation of economic development goals, The Ministry of Finance will coordinate with relevant ministries and branches to research, propose and submit to the Government to report to the National Assembly Standing Committee a plan to adjust the environmental protection tax rate to suit the actual situation.

Previously, in Resolution No. 164/NQ-CP, the Government assigned the Ministry of Finance: “Urgently complete the dossier to report to the National Assembly Standing Committee for consideration and continue to apply the environmental protection tax (Environmental Protection Tax). ) for gasoline, oil, and lubricants as stipulated in Resolution No. 30/2022/UBTVQH15 in 2024, submitted to the Government in October 2023.

On October 6, the Ministry of Finance sent an official dispatch to report to the Prime Minister, which proposed to develop the Resolution Project dossier according to shortened order and procedures. On October 12, the Government Office issued an official dispatch on developing the Resolution project, according to which Deputy Prime Minister Le Minh Khai agreed to assign the Ministry of Finance to preside and coordinate with relevant ministries and agencies. The agency develops a Resolution on environmental protection tax rates for gasoline, oil, and lubricants according to shortened procedures in accordance with the provisions of the Law on Promulgation of Legal Documents.

Expected budget revenue reduction is nearly 43 trillion VND

According to the Ministry of Finance, petroleum is an essential commodity and an input for many production industries, affecting many subjects in the economy. Therefore, reducing environmental protection tax rates on gasoline, oil, and lubricants, regardless of application, has supported the economy, people, and businesses. Therefore, continuing to implement the environmental protection tax on gasoline, oil, and grease as prescribed in Resolution No. 30/2022/UBTVQH15 in 2024 will contribute to stabilizing domestic retail prices of gasoline and oil, thereby contributing to controlling inflation and stabilizing the macroeconomy. Environmental protection tax is one of the factors that make up the domestic retail price of gasoline and oil, so adjusting the environmental protection tax rate will directly impact the domestic retail price of gasoline and oil.

With the continued application of the environmental protection tax rate on gasoline, oil, and lubricants in 2024 as the environmental protection tax rate implemented in 2023 and assuming that other factors constituting the base price of gasoline and oil remain unchanged compared to the adjustment period , Most recently, the retail price of gasoline, oil, and lubricants will decrease compared to the implementation of the tax rate specified in Resolution No. 579/2018/UBTVQH14, respectively as follows:

For gasoline (except ethanol): the reduced environmental protection tax is 2,000 VND/liter, thereby reducing the retail price of gasoline (including VAT reduction) by 2,200 VND/liter.

For jet fuel: the reduced environmental protection tax is 2,000 VND/liter, thereby reducing the retail price of jet fuel (including the VAT reduction) by 2,200 VND/liter, respectively.

For diesel oil, fuel oil, and lubricants: the reduced environmental protection tax is 1,000 VND/liter, thereby reducing the retail price of diesel, fuel oil, and lubricants (including the VAT reduction) by 1.1 respectively . 00 VND/liter.

For grease: the reduced environmental protection tax is 1,000 VND/kg, thereby reducing the retail price of grease (including VAT reduction) by 1,100 VND /kg, respectively.

For kerosene: the reduced environmental protection tax is 400 VND/liter, thereby reducing the retail price of kerosene (including VAT reduction) by 440 VND/liter.

However, because the domestic retail price of gasoline depends mainly on the world price of finished gasoline and oil, the specific reduction in domestic gasoline and oil retail prices will depend on the fluctuation of world finished gasoline prices. gender.

Similar to the reduction of environmental protection tax rates on gasoline, oil, and grease in the period 2022 – 2023, the continued reduction of environmental protection tax rates on gasoline, oil, and grease in 2024 will continue to contribute to reducing environmental pollution. increase domestic retail gasoline prices. On that basis, it contributes to directly reducing people’s costs in consuming gasoline and reducing indirect costs from consuming other products.

At the same time, it will contribute to reducing production costs, lowering product prices, helping businesses increase their ability to recover and expand production and business, especially businesses that benefit a lot from reducing environmental protection taxes on environmental protection. with gasoline, oil, and lubricants such as transportation, shipping, fishing, gas services…

The adjustment of environmental protection tax rates for gasoline, oil, and lubricants as above ensures compliance with the principles of regulating specific tax rates for each type of goods subject to environmental protection tax as prescribed in Article 8 of the Law on Environmental Protection Tax.

According to calculations by the Ministry of Finance, the expected consumption of gasoline, oil, and lubricants in 2024 is equivalent to the expected output of gasoline, oil, and lubricants consumed in 2023 and with the environmental protection tax rate on gasoline and oil. , grease as proposed above, it is expected that environmental protection tax revenue will decrease compared to if implemented according to Resolution No. 579/2018/UBTVQH14 by about 38,929 billion VND and total state budget revenue (including VAT reduction) will decrease by about 42,822 billion VND. billions dong.

Despite the impact of reducing budget revenue, the promulgation of policies to adjust environmental protection tax rates on gasoline, oil, and lubricants brings many benefits, positively supporting people’s lives and production activities. business output of enterprises. Therefore, this policy has always been supported and highly appreciated by the people and the business community.

In particular, in the context that the world petroleum market continues to be complicated, it is likely that prices will fluctuate unpredictably in the coming time, posing potential risks to economic stability. – society as well as impact on the domestic market. “The increase in environmental protection tax rates on gasoline, oil, and lubricants to the ceiling from January 1, 2024 will have a certain impact on people’s psychology, daily life as well as production and business activities. of enterprise. Therefore, there needs to be a solution to contribute to stabilizing gasoline prices and macroeconomic stability in 2024,” the draft report of the Ministry of Finance emphasized.

On the other hand, using tools to adjust environmental protection tax rates on gasoline, oil, and lubricants is considered feasible and effective to contribute to stabilizing domestic prices. This is also the solution that the National Assembly Standing Committee decided to apply to suit the evolution of gasoline prices in each period./.

Kim Chung

Source Financial magazine https://www.mof.gov.vn/webcenter/portal/btcvn/pages_r/l/tin-bo-tai-chinh?dDocName=MOFUCM290170