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Environment tax on fuel increases

Released at: 14:40, 02/05/2015

Environment tax on fuel increases

Environmental protection taxes rise while some import taxes fall.

by Son Ho

From May 1 the environmental protection tax on a number of petroleum products will increase, in some cases by three-fold. Conversely, import taxes on certain products have been slashed.

The tax on jet fuel will increase from $0.046 to $0.138 per liter, on diesel from $0.23 to $0.69 per liter, and on mazut from $0.014 to $0.042 per liter, while the rate imposed on kerosene will remain at $0.014 per liter, according to the Ministry of Finance (MoF). The State budget will collect an additional $501.69 million from the increases.

Meanwhile, import taxes on petroleum products have been officially cut. RON92, RON95 and kerosene are now subject to rates of 20 per cent rather than 35 per cent, diesel 20 per cent from 30 per cent, mazut 25 per cent from 35 per cent, and jet fuel 10 per cent from 25 per cent. The cuts will cost the State budget $602.16 million.

The MoF said that the purpose of the adjustments is to encourage the production and consumption of clean energy to protect the environment. In applying environmental protection taxes the ministry used the petrol price stabilization fund along with a suitable petroleum import policy, so there will be little impact on retail prices.

“The use of revenue from environmental protection taxes will be based on the current regulations for the State budget,” said Mr. Pham Dinh Thi, Head of the Tax Policy Department. Regarding future tax policy, the ministry will closely monitor price movements around the world and propose a suitable policy, according to Mr. Thi.

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