Vietnam’s fuel tax is fair and low, compared to region: finance ministry

By Nguyen Hoai   October 13, 2016 | 12:05 am PT
Some say local consumers are heavily taxed, but finance officials insist that’s not true.

Finance officials have rejected suggestions that Vietnamese drivers are heavily taxed at the pump, arguing that the combined tax rate on gasoline products is much lower than regional levels.

For every liter of gasoline, the government collects a special consumption tax, an environmental tax, a compulsory contribution to the national price stabilization fund, and finally a 10 percent value-added tax on top of everything, said Pham Dinh Thi, tax policy director at the Ministry of Finance.

The total tax rate of 41.5 percent on the popular grade RON 92 is lower than those of neighboring countries, Thi told a press conference on Tuesday, describing the way fuel taxes are calculated as “fair.”

According to the official, the combined tax rate on gasoline is 56 percent in Cambodia and 70 percent in South Korea.

The remarks came amid suggestions that Vietnamese consumers are overburdened by multiple layers of taxes and duties and that pump prices could have been much lower.


Consumers wait to get fuel for their motorbikes at a gas station in Vietnam. Photo by Petrolimex

Some experts have also pointed out that, since July 1 the special consumption tax has been calculated on a higher base, after duties and markups are already added. Previously, the tax was calculated based on the import price. The new method means consumers must pay an extra VND200 per liter of gasoline, an expert estimated.

Earlier this month the government hiked pump prices for the fourth time in a row. The RON 92 grade now retails at VND16,400, or around 75 cents.

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