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Vietnam plans cuts in fuel taxes as inflation rises

24 Tháng Chín 2022
Vietnam plans cuts in fuel taxes as inflation rises © Reuters. FILE PHOTO: An employee pumps petrol for clients at a petrol station in Hanoi, Vietnam December 20, 2106. REUTERS/Kham

HANOI (Reuters) - Vietnam's finance ministry on Friday said it is proposing to the legislature cutting the special consumption tax and value-added tax on fuels to keep inflation under 4% this year.

The move will follow this week's decision by the central bank to raise policy rates and several previous cuts in taxes on fuels since March, including the environment tax and Most Favoured Nation tariff.

The finance ministry is proposing two scenarios for the cuts - a 50% cut in special consumption tax and a 20% cut in value-added tax or a 50% cut in both the taxes, it said in a statement.

According to the ministry, tax collection would be reduced by 7.4-12.2 trillion dong ($312.24-$514.77 million), with the average consumer price index 0.1%-0.15% lower if the new tax rates are in place for six months from November.

Vietnam, a regional manufacturing hub, reported gross domestic product growth of 7.72% in the second quarter this year, but like many of its neighbours is facing mounting inflationary pressure as prices of food and energy rise across the world.

($1 = 23,700 dong)

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29-09-2022 06:41:09 (UTC+7)

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