The government proposed to dramatically increase the environmental tax on gasoline.
Each liter of gasoline will be subject to an environmental tax of VND4,000 and oil will be subject to VND2,000, both of which are the highest rates under the current framework.
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After consulting with ministries, branches, localities and other parties, under the order of the Government, the Ministry of Finance has just submitted to the National Assembly Standing Committee on environmental protection tax. After being submitted by the Government, the National Assembly Standing Committee will give its opinion and decide whether to approve it or not after listening to the assessment from the examining agency.
Environmental protection tax schedule for some goods
Unit: VND
| Goods | Current level | Recommended level |
| Gasoline (except ethanol) | 3,000 | 4,000 |
| Diesel | 1,500 | 2,000 |
| Madut oil | 900 | 2,000 |
| Lubricants | 900 | 2,000 |
| Grease | 900 | 2,000 |
In the proposal, the Government proposed to increase the tax on gasoline from 3,000 VND to 4,000 VND, and on diesel from 1,500 VND to 2,000 VND. Fuel oil, lubricants, kerosene, and grease also increased to 2,000 VND per liter.
Thus, the Government has proposed to increase the above items to the maximum level according to the framework allowed by the National Assembly Standing Committee. According to calculations, the budget will have an additional 14,368 billion VND per year from increasing environmental protection tax on gasoline.
With the adjustment plan expected from July 1, according to calculations, the increase in environmental tax could impact the CPI in July 2018 (compared to June) by about 0.27-0.29% and impact the average CPI for the whole year of 2018 by 0.11-0.15%.
However, according to the proposal, this tax increase will encourage the production and consumption of environmentally friendly goods such as E5 gasoline, E10 gasoline, B5 diesel, B10 diesel, and more environmentally friendly plastic bags.
In addition, for coal of all kinds, this agency also proposed to increase the tax rate because this is a product that causes serious environmental pollution when used.Similar to taxable plastic bags, the Government also proposed to increase the tax rate to 50,000 VND per kilogram, which is also the ceiling rate prescribed for this item.
Overall, with these proposals for all items, the total budget increases by 15,189 billion VND (of which 95% still comes from increasing taxes on gasoline).
