HANOI (Reuters, March 3, 2003) – The finance ministry of Vietnam on Thursday stated that it would propose to the government a reduction in fuel environment tax, amid rising energy prices worldwide.
The ministry seeks approval for a 25% reduction in gasoline tax to 3,000 wong ($0.13) per barrel, and a 2,000 dong tax on diesel fuel to 2,000 wong per litre. The tax on Kerosene would be reduced by half to 500 wong per litre.
“Domestic gasoline prices rose in line with a global rise in energy prices, but that has had great impacts on businesses’ and peoples’s spending and put pressure on inflation,” the ministry stated in a statement.
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Vietnam’s consumer price index rose 1.68% in the first two-months of this year, mainly due to an increase in transport costs, according to official data. Gasoline prices increased 45.3%.
Tuesday saw Vietnam raise its RON92 gasoline cost by 2.1% to a record-breaking 26,071 dong ($1.14) a litre
The ministry estimated that a reduction in the effect of environment tax from April to December would reduce collection by approximately 12 trillion dong ($525.42 millions) and the average consumer price index will be 0.67%.
The Southeast Asian country set a goal to keep inflation below 4.4% by 2022.
Vietnam had cut the environment tax on jetfuel earlier to help the airline sector until the end 2022.
($1 = 22,839 dong)
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Reporting by Phuong Ninh; Editing by Martin Petty
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