When the global oil price is below US$70 a barrel, the tax rates would reach the ceiling level of the tax bracket, which is VND4,000 per liter on gasoline, VND3,000 per liter on jet fuel and VND2,000 per liter on diesel oil.

If oil prices range from US$70 to US$80 a barrel, the environmental protection tax on gasoline, oil and grease would be reduced by 25%, compared to the upper limit of the tax bracket. That means the tax rates are VND3,000 per liter on gasoline, VND2,259 per liter on jet fuel and VND1,500 per liter on diesel oil.

If the global oil price lies between US$80 and US$100 per barrel, the tax would be cut by 50%. Accordingly, the environment tax rates are VND2,000 per liter on gasoline, VND1,500 per liter on jet fuel and VND1,000 per liter on diesel oil.

When the world oil price exceeds US$100 per barrel, the tax rates would be lowered to the floor level of the tax bracket, VND1,000 per liter on gasoline, VND1,000 per liter on jet fuel, and VND500 per liter on diesel oil.

According to the Ministry of Finance, the flexible application of the environmental protection tax rates on gasoline, oil and grease would help ensure the balance in benefits among the State, enterprises and people.

The State’s budget revenue will not be reduced if the global oil price is lower than US$70 per barrel. The average collection of environmental protection taxes on gasoline, oil and grease is expected to reach VND5,130 billion monthly.

If the oil price ranges from US$70-80, or US$80-100, or exceeds US$100 per barrel, the environmental protection tax collection would fall by VND1,282 billion, VND2,565 billion, and VND3,838 billion, respectively.

The Ministry of Finance proposed applying these tax rates from January 1, 2023, when the resolution on environment tax reduction expires at the end of this year.

Source: Saigon Times