Vietnam spends a third of green tax on environment

By Ha Phuong February 14, 2017 | 03:56 am PT

The government is considering another environmental fuel tax hike even though spending on the environment has barely kept pace.

Vietnam may almost triple an environmental protection duty imposed on fuel products from the current VND3,000 ($0.13) to VND8,000 per liter, according to a proposed amendment to the Environmental Protection Law prepared by the Ministry of Finance.

Fuel already accounts for 90 percent of the environmental protection tax.

The ministry claims the tax increase aims to improve awareness of environmental protection, resulting in less consumption of goods that cause pollution.

However, while revenue from environmental tax has nearly quadrupled over the past five years, spending on environmental protection has only risen around 1.4 times.

In comparison with other countries in Southeast Asia, Vietnam’s gasoline prices are not very high. When it comes to affordability, meaning the percentage of a day’s minumum wages needed to buy gas, Vietnam stands among the most affordable.

The draft proposes a significant increase to the cost of gasoline and other refined oil products.

The tax details are as follows:

Product	Current rates (VND)	Proposed rates (VND)
Gasoline	1,000 - 4,000	3,000 - 8,000
Jet fuel	1,000 - 3,000	3,000 - 6,000
Diesel	500 - 2,000	1,500 - 4,000
Fuel oil	300 - 2,000	900 - 4,000
E5 (biofuel)		2,700 - 7,200
E10 (biofuel)		2,500 - 6,800
USD1 = VND22,720