Vietnam approves 2nd environmental tax cut on fuel

In an extraordinary meeting Wednesday morning, the Standing Committee of the National Assembly greenlighted an additional 25 percent cut on environmental tax to bring it down to VND1,000 ($0.04) per liter from July 11 until the end of the year.

The tax was originally VND4,000 per liter and was cut to VND2,000 in April this year.

Starting next week the environmental tax on diesel will also be cut from VND1,000 per liter to VND500.

The government initially proposed lawmakers to approve the cut starting Aug. 1, but Vuong Dinh Hue, chairman of the National Assembly, said Wednesday it should come into effect starting next week.

He added that the government should consider bringing down value-added tax and special consumption tax on fuel to reduce the impact of rising fuel prices on inflation.

The government estimates that the latest environmental tax break would bring the consumer price index this year down by around 0.15 percentage points.

RON95 gasoline price has risen 41 percent to VND32,760 this year.