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Vietnam plans cut in environment tax on fuel as prices soar

Vietnam plans cut in environment tax on fuel as prices soar

FILE PHOTO: An attendant pumps petrol for a car at a petrol station in Hanoi March 11, 2015. REUTERS/Kham

HANOI : Vietnam's finance ministry on Thursday said it would propose to the government a cut in environment tax on fuel, amid soaring energy prices globally.

The ministry is seeking approval to lower the tax by 25per cent on gasoline to 3,000 dong ($0.13) per litre, and reduce the tax on diesel fuel and lubricants to 2,000 dong per litre. Tax on kerosene would be cut by half to 500 dong per litre.

"Domestic gasoline prices recently rose in line with a global surge in energy prices but that has caused great impacts on businesses and people's spending, and put pressure on inflation," the ministry said in a statement.

Vietnam's consumer price index in the first two months rose 1.68per cent from a year earlier, led by an increase in transport costs, official data showed, with gasoline prices up 45.3per cent.

On Tuesday, Vietnam raised its RON92 gasoline price by 2.1per cent to a record high 26,071 dong ($1.14) per litre.

The ministry estimated that with a cut in effect from April to year-end, environment tax collection would be reduced by about 12 trillion dong ($525.42 million) and the average consumer price index would be 0.67per cent lower.

The Southeast Asian country aimed to keep inflation below 4per cent for 2022.

Vietnam had earlier cut environment tax on jet fuel to help the airline industry until the end of 2022.

(Reporting by Phuong Nguyen; Editing by Martin Petty)

Source: Reuters

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