Lawmakers will consider further fuel tax cuts at the next session of the National Assembly in October, but the transport industry wants them to be done sooner.
Gasoline prices are hovering at record levels of nearly VND33,000 ($1.41) a liter, having risen by 60 percent since the end of last year.
This and the rising input costs have derailed companies’ post-Covid recovery.
Nguyen Manh Hung, CEO of transport firm International Logistics, said fuel accounts for 40 percent of costs, and the price hikes have increased fuel costs for a north-south trip by VND3 million.
The company would not survive for long if the situation persists, he added.
Nguyen Van Quyen, chairman of the Vietnam Automobile Transportation Association, said the National Assembly could hold an extraordinary session to approve the tax cuts soon.
If they are delayed until October the transport industry would be hit much harder, he said.
“Only cutting value-added tax and excise duty by at least 50 percent until the end of this year can save the industry.”
Nguyen Bich Lam, ex-director of the General Statistics Office, too advised against delaying the tax cuts and called for an extraordinary session.
“If [we] wait until October, rising costs will cause a huge burden on businesses and the economy,” he told VnExpress.
On Wednesday the National Assembly Standing Committee held an extraordinary session to greenlight the environmental tax cut on gasoline.
The tax, originally a flat VND4,000 a liter, was halved in April and will be further cut to VND1,000 on Monday.
The chairman of the National Assembly, Vuong Dinh Hue, said the government should soon submit further tax cut proposals to legislators for approval.
“Urgent [situations] need to be handled accordingly.”
The NA holds regular sessions twice a year.
Extraordinary sessions can be called by the president, the Standing Committee, the prime minister, or at least a third of lawmakers.
Excise duty on gasoline is 7-10 percent and value-added tax is 10 percent.
By halving them, gasoline prices could be cut by VND2,800 a liter.
It will cost the government’s coffers VND15-16.25 trillion.
But Lam said: “We should accept the sacrifice. Lowering taxes on gasoline in the short term will stabilize the market and business activities.”
He also called for subsidizing fuel if prices surge and increasing supply to reduce risks to the economy.
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