HCMC – The Vietnam Chamber of Commerce and Industry, or VCCI, has repeated its proposal that the Ministry of Finance abolish the special consumption tax on gasoline.

Gasoline is currently subject to import, environmental protection, special consumption and value-added taxes. Among the four taxes, the special consumption and environmental protection taxes are intended to discourage consumption.

But gasoline is an essential consumer product widely used in production and daily life, while the special consumption tax should only be levied on non-essential goods to discourage consumption, such as cigarettes, alcoholic beverages and luxury cars, VCCI said.

Therefore, VCCI proposed eliminating the special consumption tax on gasoline. If needed, the Ministry of Finance could adjust the environmental protection tax.

Currently, the special consumption tax, or excise tax, is 10% for ordinary gasoline, 8% for bio-gasoline E5, and 7% for gasoline E10.

VCCI made this proposal in September 2022 while providing feedback on a draft resolution of the National Assembly on halving both the special consumption tax and the value-added tax on fuel to cushion the impact of the steep global fuel price rises.

However, the Ministry of Finance rejected it and emphasized that the application of the special consumption tax on gasoline is reasonable as Vietnam has been striving to fight climate change and commit to achieving net-zero emissions by 2050.