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Vietnam considering fuel tax cuts amid inflation pressure: FinMin

Vietnam considering fuel tax cuts amid inflation pressure: FinMin

Wednesday, June 08, 2022, 21:07 GMT+7
Vietnam considering fuel tax cuts amid inflation pressure: FinMin
An employee pumps petrol into a car at a petrol station in Hanoi, Vietnam December 20, 2016. Photo: Reuters

HANOI -- Vietnam is considering cutting taxes on fuel to help ease prices at all-time highs, but inflation remains under control and helped by domestic food production, its finance minister said on Wednesday.

Taxes of all kinds account for around 30% of retail prices, including an 8% import tax and 10% value added tax.

“Cutting fuel tax would help reduce prices and therefore cut production costs for businesses and boost growth,” Ho Duc Phoc told parliament on Wednesday, without saying which taxes would be cut, or by how much.

Vietnam, a regional manufacturing powerhouse, is facing mounting inflation pressure, he said, due to heavy reliance on imported fuels, equipment, fertilisers and materials.

However, Phoc said inflation was still under control, with consumer prices in the first five months of this year having risen by only 2.25% from a year earlier.

The country targets inflation below 4% for this year.

He said domestic food production has helped offset the inflation pressure.

Vietnam is the world’s third largest rice exporter, after India and Thailand.

In April, Vietnam halved environment tax on gasoline, and on diesel fuel and lubricants to VND2,000 ($0.0863) per litre and VND1,000 per litre respectively.

Retail gasoline prices in Vietnam range from VND30,230 ($1.30) to VND32,810 ($1.41) per litre. ($1 = VND23,185) 

Reuters

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