People buy petrol at a station in Hanoi. VCCI argues that since gasoline is not a luxury item, imposing an excise tax on it is unnecessary.(Photo: VNA) In response to the MoF's official dispatch on the draft Law onSpecial Consumption Tax, VCCI notes that gasoline products are subject totwo forms of taxes, both of which aim to restrict consumption including excisetax and environmental protection tax.
It argues that since gasoline is not a luxury item, imposing an excise tax onit is unnecessary and only serves to protect the environment which is redundantas gasoline products are already subject to the environmental protection tax.
The VCCI recommends that the drafting agency investigate thepossibility of removing the excise tax on gasoline, and if necessary, adjustthe environmental protection tax to achieve the objectives of this tax.
This is not the first time the VCCI has suggested removing theexcise tax on gasoline. In September of last year, the VCCI submitted a writtenresponse to the MoF suggesting that the reduction of taxes on petroleumproducts would help control inflation, stabilise the macro-economy, supportbusinesses and boost economic recovery.
Despite the VCCI's recommendations, the Ministry of Financemaintains that the excise tax on gasoline is necessary to combat climate changeand achieve its goal of reducing net emissions to zero by 2050.
The Ministry argues that gasoline is a fossil fuel, and because itis non-renewable and needs to be used sparingly, most countries impose excisetaxes on gasoline. The Ministry believes that this regulation is in line withthe objectives of the excise tax and is in accordance with internationalpractices.
At present, ordinary gasoline is subject to a 10% excise tax, whilebio-gasoline E5 is taxed at 8%, and gasoline E10 at 7%./.
VNA
