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| The price of petroleum products plunges after reducing Environmental protection tax |
Many policies issued and developed
The Ministry of Finance said that in the uncertain development of petroleum product market and the high level of crude oil price in the world market, the Ministry of Finance reported competent authorities to issue tax policies to stabilize petroleum prices and control inflation, ensure macroeconomic stability and energy security.
Regarding the Environmental Protection Tax, the ministry has reported to the Government to submit to the National Assembly Standing Committee for promulgation of Resolution of 20/2022/UBTVQH15 dated July 6, 2022, revising down the environmental protection tax for gasoline, oil and grease to the floor level as per regulations in the Law on Environmental Protection Tax until the end of December 31.
On July 10, the Ministry of Finance issued Official Dispatch 6622/BTC-CST sending to the General Department of Taxation, tax departments of the provinces and centrally-run cities, the General Department of Vietnam Customs, the municipal and provincial customs departments on the implementation of policies to ensure transparency and consistency.
Regarding import and export taxes, the ministry submitted the Report 166/TTr-BTC to the Government on the draft Decree on reduction of most-favoured-nation (MFN) rates for unleaded motor gasoline under Heading 27.10 from 20% to 10%.
The promulgation of this policy will contribute to diversifying supply sources, creating opportunities to access new supply sources for importers instead of depending on the supply from South Korea or ASEAN member states, promoting the stability of the domestic petroleum market, ensuring national energy security amid unpredictable fluctuations in the world petroleum market. The Government Office is currently gathering feedback from Government members to submit to the Government for promulgation.
On July 28, 2022, the Ministry of Finance proposed the Prime Minister on the policy of Value-added tax and Excise Tax for petroleum products. After consulting with the Prime Minister, the ministry will coordinate with relevant ministries and branches to develop documents in line with regulations in the Law on Promulgation of Legal documents.
Stabilize commodity prices after petroleum prices fall
Petroleum is a key input fuel in the economy. Fuel costs account for a large portion of the cost structure of goods and services such as transportation, said the Ministry of Finance.
In July, petroleum prices were been revised down three times and plunged on July 11 and 21 due to the reduction of environmental protection tax and decrease in global petroleum prices. The reduction in petrol prices will have a direct or indirect impact on the prices of commodities, especially products and services that mainly use petroleum products in production.
However, the Ministry said despite the plunge in domestic prices, prices of essential consumer goods still surged due to factors such as the impact of input material prices, inventory levels, production capacity, seasonal fluctuations, and long term-increase in input materials, so it is not possible to fall prices immediately.
Recently, the Prime Minister sent a memo directing ministries, government agencies and localities to strictly control the prices of products and services after petroleum price were reduced sharply; review the price declaration of items affected by the petroleum price such as services of passenger and goods transport and logistics to adjust in line with the fluctuations of input factors, especially petroleum costs in price-forming factors; strengthen inspection of the compliance with price listings, service fee collection of enterprises, and handle cases that illegally increase the price.
For essential goods and services, which are indirectly affected by petroleum prices, that have an impact on the consumer price index and people’s lives, production and business activities of enterprises, the Prime Minister requested ministers, heads of ministerial-level agencies, People’s Committees of provinces and centrally run cities to closely monitor market price movements, grasp the operation of organizations and individuals to take appropriate management and price stabilization measures; strengthen inspection and control of the observance of the law on prices, price declaration and list measures, and handle cases illegally raising prices, checking the price-forming factors under the Law on Prices when goods have abnormal fluctuations and handle violations.
As for freight costs, the Ministry of Transport is the agency in charge of state management in the field of transportation and the Ministry of Finance is the coordinating agency upon request.
The Ministry of Transport and the Department of Transport currently receive price declarations for land fixed-route transport; passenger transport by taxi, prices for aviation services in the list of prices stipulated by the State; the price of domestic air passenger transport services under the list of price bracket regulated by the State.
The Prime Minister requested the Ministry of Transport to revise down costs to reduce the prices of goods and transport services priced by the State. For goods and services subject to price declaration, the Prime Minister asked the declaration-receiving agency to review the declared price of transport services in accordance with the fluctuating price-forming factors, and to advise the competent agencies to control the price in line with the reality.