Government rejects airlines’ demand for further tax cuts

In response to several airlines’ request to reduce value-added tax from 8 percent to 5 percent and fuel import tax from 7 percent to zero, the ministry said in a statement Friday that only the National Assembly can decide on VAT cuts.

The current 8 percent VAT is already a reduction from the normal 10 percent, and aviation companies are also eligible for the lower rate, it said.

It also pointed out that the aviation industry has already benefited from a lot of support in terms of taxes and fees since the pandemic began.

Environment tax on jet fuel has been reduced by half to VND1,500 per liter until the end of this year.

It is important to ensure a balance between the benefits companies and the government get, the ministry said.

Vietnamese carriers served 14.5 million passengers in the first four months of this year, up 26.3 percent year-on-year, according to the General Statistics Office.

Airlines resumed regular international services in March after a two-year hiatus due to Covid-19.