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Vietnam plans to cut environment tax on jet fuel by 50%

Vietnam plans to cut environment tax on jet fuel by 50%

Friday, November 26, 2021, 15:48 GMT+7
Vietnam plans to cut environment tax on jet fuel by 50%
An aircraft of the national flag carrier Vietnam Airlines taxis past a Vietjet aircraft at Noi Bai airport in Hanoi, Vietnam December 23, 2020. Photo: Reuters

HANOI -- Vietnam plans to further cut environment tax on jet fuel to help the airline industry, which is struggling from the impacts of the coronavirus pandemic, its finance ministry said on Friday.

The ministry is seeking government approval to lower the jet fuel tax by 50% for the whole of 2022, compared with the current 30% cut, which is due to expire at the end of this year.

"It's necessary to continue cutting environment tax in 2022 to help local airlines weather the impact of the coronavirus pandemic," it said in a statement.

"Jet fuel tax will be at VND1,500 ($0.0662) per litre after the cut."

Vietnam imposed tight border controls at the start of the pandemic and suspended almost all inbound flights to keep out COVID-19, which dealt a blow to its airline industry.

Official data showed the industry suffered a loss of VND16 trillion ($705.78 million) in 2020, when Vietnam was only mildly affected by the virus.

This year's loss is expected to be greater as domestic flights were halted for nearly six months while movement curbs were imposed to contain the country's worst outbreak so far.

According to the ministry, environment tax reduction would help the aviation industry to overcome difficulties, especially when the country was seeking to resume international flights next year.

($1 = VND22,670)

Reuters

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