National Assembly does not approve environmental tax increase on gasoline

The proposal to double the environmental protection tax bracket for gasoline and oil has not received consensus from the National Assembly's standing body.

The National Assembly Standing Committee has given its opinion on the draft Law amending and supplementing a number of articles of the Law on Environmental Protection Tax. Accordingly, the new tax bracket proposed by the Government for gasoline is 3,000 - 8,000 VND (minimum - maximum) per liter, instead of the current 1,000 - 4,000 VND. The price of plastic bags is also proposed to be adjusted to 40,000 - 200,000 VND per kilogram, instead of the current 30,000 - 50,000 VND per kilogram.

Commenting on the draft law, National Assembly Chairwoman Nguyen Thi Kim Ngan said that it is rare for a draft law to have views from the drafting and reviewing agencies so far apart. Ms. Ngan also reiterated the Prime Minister's view of limiting the increase of taxes and fees at the present time to remove difficulties for businesses. Regarding gasoline, the current tax rate framework has not yet applied the maximum level (VND4,000 per liter), so the proposal to increase the new tax framework needs to be considered.

Meanwhile, Vice Chairman of the National Assembly Phung Quoc Hien said that Finance Minister Dinh Tien Dung's explanation "made sense, but the Minister's reasoning did not convince the Standing Committee."

The National Assembly's standing body has not agreed to the proposal to increase the environmental protection tax on gasoline to VND8,000/liter.

Examining the draft law, the National Assembly's Finance and Budget Committee stated that the drafting agency's comparison of Vietnam's base price tax rate with that of some countries, which is currently at a low level (37.49% for gasoline), as a basis for adjusting the environmental protection tax rate, is not consistent with the actual income of the people. Therefore, the cost of gasoline and oil compared to the income of the Vietnamese people accounts for a very high proportion.

The Ministry of Finance has not yet clarified the roadmap for reducing import taxes on gasoline and oil and the reduction in budget revenue from these items; nor has there been an impact assessment if environmental taxes are increased to the ceiling, how much budget revenue will increase and how will people's lives be?

"The analytical data proving the increase in the ceiling tax rate for gasoline and oil in the current tax bracket, while the proposal to increase the tax base based on qualitative factors, is not really convincing. Therefore, the proposal to double the ceiling tax rate for gasoline and oil as in the draft law is not really appropriate," the inspection report of the National Assembly's standing body stated.

Explaining to the National Assembly's standing body, Finance Minister Dinh Tien Dung said that the increased state budget from this source will be used to carry out socio-economic tasks, including spending on environmental protection, while still ensuring the competitiveness of the economy and Vietnam's key products.

In addition, the increase in the maximum tax bracket to 8,000 VND per liter of gasoline not only raises people's awareness of environmental protection, but also ensures policy stability and is consistent with the roadmap for replacing import taxes that must be gradually reduced according to international commitments. This is also consistent with the collection levels of neighboring countries, avoiding gasoline smuggling.

According to VNE