VCN – The Government promulgated Decree No.51/2022/NĐ-CP, officially reducing the rate of import duty for unleaded fuel under the HS code (from 2710.12.21 to 2710.12.29) from 20% to 10%.
|The rate of import duty for unleaded fuel reduce by 10%. Photo: Nguyễn Thanh
The Government promulgated Decree No.51/2022/NĐ-CP, amending the rate of preferential import duty for petroleum under heading 27.10 at the Preferential import tariff schedule following the list of goods subject to tax attached to Decree No.57/2020/NĐ-CP of the Government dated May 25, 2020, on amending and supplementing a number of articles of Decree No. 122/2016/NĐ-CP of the Government dated September 1, 2016 on Schedule of Export Duty and Preferential import Tariffs, List of goods and its flat tax compound tariff and out of quota import tariff; Decree No. 125/2017/NĐ-CP dated November 16, 2017 amending and supplementing a number of articles of Decree No. 122/2016/NĐ-CP.
Amending the Most Favored Nation (MFN) for gasoline products in heading 27.10 specified in Appendix II – Preferential import tariff according to the List of goods subject to tax specified in Clause 1, Article 2, Decree No. 57/2020/ND-CP dated May 25, 2020 of the Government, into a new preferential import tax rates specified in the Appendix issued together with Decree Decree No. 51/2022/ND-CP.
The import tax rate for unleaded fuel (under HS code from 2710.12.21 to 2710.12.29) is decreased from 20% to 10%.
According to the Ministry of Finance, compared with many countries, the proportion of tax on price of petroleum in Vietnam is still lower than the general average. The proportion of tax in the price of petroleum in many countries is mainly in the range of 40%-55% for gasoline and 35%-50% for oil (except for some countries with large oil reserves). In Vietnam, with the environmental protection tax rate being reduced to the floor level according to the resolution passed by the Standing Committee of the National Assembly, the tax proportion in the price of petrol is about 19.39% for E5RON92, 21.95% for RON95 and about 11.05% for diesel.
Assessing the impact on revenue collection, according to the Ministry of Finance, currently, gasoline products are mainly imported from countries that have signed FTA Agreements with Vietnam, so they are subject to import tax rates under FTA which is lower than the MFN import tax rate.
According to the General Department of Vietnam Customs, in 2021, Vietnam’s total import turnover with tax on petroleum products was US$475.26 million. In particular, imports from countries that have signed FTAs with Vietnam were US$474.1 million (accounting for 99.7%). In the first five months of 2022, the total import turnover with tax on gasoline products was US$826.53 million, which is also basically imported from countries that have signed FTAs with Vietnam.
It can be seen that the proportion of imported gasoline under the current MFN import tax rate is low, in the event that other conditions remain unchanged, the reduction of the MFN import tax rate for gasoline products following the basic plan will not have much impact on state revenue collection.
By Thùy Linh/Thanh Thuy