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Vietnam's Increased Green Tax on Fuels Next Year Will Bring in $677m Yearly

An extra VND15.7 trillion each year for environmental projects will be added to the national budget thanks to the new tax rate.

On September 20, the Standing Committee of National Assembly passed a resolution that will increase the environment tax on fuels from VND3,000 per litter to VND4,000 per litter in 2019, Zing reports. Kerosene and diesel's green tax will increase from VND1,500 to VND2,000 and VND300 to VND1,000, respectively.

For mazut and lubricants, the current tax rate of VND900 per litter will also be hiked up to VND2,000. The environment tax increase was proposed back in July but met several concerns regarding inflation and never came into full realization until now.

According to Nguyen Duc Hai, director of the National Assembly Finance and Budget Committee, the new tax rate is scheduled to go into effect in January 2019 in order to avoid inflation and abrupt increase in the Consumer Price Index (CPI) of this year, and to give the government time to alleviate the damage it might have on people's livelihoods and the economy.

The National Assembly predicts that the new tax will only affect 0.07% to 0.09% of the CPI in 2019.

On the bright side, the new tax increase is expected to contribute an extra VND15.7 trillion (US$677 million) to the national budget for environmental projects, said Phung Quoc Hien, deputy director of the National Assembly.

Besides fuels and oil, the new environment tax will also be applied to goods that have harmful effects on the environment such as coal, nylon bags, herbicides, termiticides, and other types of pesticides.

[Photo via Thanh Nien]

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