In brief
Vietnam has abolished the special consumption tax on all gasoline grades through March 31 2027, following a resolution passed on Saturday. The decision restores the zero‑rate that temporarily applied from late March to June 2026, while the environmental protection tax remains zero and VAT exemption on these fuels is extended through the end of 2026. The measures come as the government seeks to stabilise the domestic market, but its long‑term effects on prices, revenues and the environment have not yet been clarified.
Vietnam has abolished the special consumption tax on all gasoline grades through March 31 2027, a change announced by a government resolution that passed on Saturday and took effect the following Sunday, according to a Xinhua report citing local daily VnExpress.
The resolution removes the 10 percent tax that applied to regular gasoline and the lower 8 percent and 7 percent rates that cover E5 and E10 biofuel blends, respectively, under the special consumption tax law that began on July 1 of this year.
Prior to the new resolution, the tax had already been suspended at zero percent from late March until the end of June 2026 as part of a temporary effort to stabilise the domestic market, the Xinhua story noted.
In addition to the tax cut, the government keeps the environmental protection tax on gasoline and oil products at zero Vietnamese dong per litre, a rate that has not changed. These fuels also remain exempt from value‑added tax declaration and payment under a policy that will endure through the end of 2026, the article added.
Xinhua quoted a statement from the resolution: “Vietnam has reduced the special consumption tax on all types of gasoline to zero percent.”
Govt. spokesman Xiao Li said the measure was designed to curb fuel costs for consumers and businesses, though the statement did not provide data on expected savings or any funding gap estimates.
Industry analysts point out that the tax exemption does not alter the existing VAT and environmental protection tax framework, meaning that the overall fiscal impact on government revenues remains to be calculated.
The policy also carries implications for the biofuel market, since E5 and E10 still carry reduced excise rates, a fact highlighted by the Xinhua article, but their market share in Vietnam is not quantified in the release.
As the government has extended several tax incentives until the end of 2026 and now to 2027, analysts argue that the combination of zero excise rates and VAT exemptions could shift the cost structure of gasoline purchases, yet the precise range of price changes is not yet public.
Hence, while the reduction to a zero‑percent rate itself is clear, the broader economic and environmental consequences of this policy decision remain undetermined, as government officials, industry experts and market observers have yet to provide detailed impact assessments.
