Budget deficit of nearly 20,000 billion VND due to reduction in environmental tax on gasoline

Since the beginning of the year, according to the resolution of the National Assembly Standing Committee, the environmental protection tax on gasoline has been reduced by half compared to the tax bracket. Specifically, the environmental protection tax on gasoline (except ethanol) is 2,000 VND per liter. Jet fuel, diesel, fuel oil, and lubricants are 1,000 VND per liter. The tax on kerosene is 600 VND per liter.

According to data from the General Department of Taxation (Ministry of Finance), as of July 22, the reduction of environmental protection tax has caused the budget to lose about VND19,790 billion in revenue. Of which, the reduction in tax revenue from gasoline and oil is about VND18,640 billion, and from aviation fuel is VND1,150 billion.

Previously, the Government calculated that the total state budget this year would reduce revenue (including VAT) by nearly VND39,000 billion. However, extending the reduction of environmental protection tax on gasoline and oil until the end of 2024 will contribute to directly reducing costs for people and businesses, increasing their ability to recover. From January 1, 2025, this tax will return to the ceiling level in the tax bracket, which is VND4,000 per liter for gasoline (except ethanol); oil and grease VND2,000 (excluding kerosene VND600) and jet fuel VND3,000 per liter.

Every year, Vietnam consumes 22-23 million m3, tons of gasoline of all kinds. According to data from the Ministry of Industry and Trade, in the first half of this year, the whole country consumed about 13.2 million m3, tons of gasoline. This level decreased by about 0.2% compared to the first 6 months of 2023.

However, in the first 7 months of the year, the total budget revenue managed by the tax sector was more than 1 million billion VND, an increase of nearly 15% over the same period.