CEO Morning Brief

Vietnam Looks to Attack Inflation With Fuel Tax Cuts

Publish date: Thu, 07 Jul 2022, 09:06 AM
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TheEdge CEO Morning Brief

(July 6): Vietnam is battling rising inflation by cutting taxes at the gas pump.

The National Assembly Standing Committee on Wednesday approved its second cut to the environmental fuel tax on gasoline in three months, a 50% reduction to 1,000 dong (US$0.04) per liter that will go into effect July 11 through Dec 31. The tax on diesel will be cut to 500 dong. The tax on jet fuel will be reduced by 500 dong to 1,000 dong a liter.

The government lowered retail gasoline prices July 1 for the first time after seven consecutive hikes. The RON-95 gasoline price announced early this month is about 40% higher from the beginning of the year, while RON-92 gasoline price is up 37%.

Vietnamese Prime Minister Pham Minh Chinh on Monday directed Ministries and provincial governments to prioritize curbing inflation to ensure economic stability. Vietnam’s June consumer prices rose 3.37% year-on-year, its fastest in almost two years, according to data compiled by Bloomberg.

Vietnam’s Finance Ministry is proposing slashing gasoline excise taxes and value-added taxes.

The Transport Ministry, meanwhile, is seeking to waive or reduce an array of transport fees from August to the end of the year, according to a statement on the government’s website. The proposal includes a 30% reduction in road use fees for passenger transport vehicles, a 50% cut in railway infrastructure fees and waiving entry and departure fees at river ports.

Source: TheEdge - 7 Jul 2022

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