Vietnam mulls environmental tax hike on petroleum products, plastic bags

By Thanh Thanh Lan   January 15, 2017 | 12:06 pm GMT+7
Vietnam mulls environmental tax hike on petroleum products, plastic bags
An employee pumps gasoline into a car at a gas station in Hanoi, Vietnam December 20, 2016. Photo by Reuters/Kham

Spending on environmental protection has not kept pace with significant tax increases.

Vietnam may raise an environmental protection duty imposed on petroleum products and plastic bags, according to a proposed amendment to the Environmental Protection Law prepared by the Ministry of Finance.

The draft proposes a significant increase in the cost of gasoline and other refined 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 = VND22,605

The ministry also wanted to hike the tax on plastic bags to VND40,000-80,000 per kilogram from the current VND30,000-50,000.

In May 2015, Vietnam tripled its environmental protection taxes to make up for revenue lost from the country's accession to the ASEAN Trade in Goods Agreement (ATIGA), which required it to lower import duties on oil products.

Vietnam gained VND42.4 trillion of revenue from environmental protection tax in 2016, jumping nearly 57 percent from 2015.

During the same period, spending on environmental protection last year reached just VND12.3 trillion, accounting for 29 percent of the tax revenue.

Last year's spending represented a 7.9 percent year-on-year increase from 2015, Tuoi Tre Newspaper reported Sunday, quoting data from the Ministry of Finance.

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