A 50 percent cut to Vietnam’s Environment Tax on jet fuel, petrol, and grease, first implemented as a COVID-19 economic stimulus measure, will be extended to the end of next year. The tax cut was originally set to end on the first of January.
Of note, Kinh Te Thi Doi has pointed out that the same tax reduction in 2023 put a dent in the national budget to the tune of VND 34,473 billion or US$1.35 billion. It does, however, argue that the cuts are an effective economic stimulant.
Thanh Nien, on the other hand, has pointed out that this is the fifth time a reduction has been approved in the Environment Tax since it was implemented six years ago.
Neither publication, however, has mentioned the original purpose of the tax which was to reduce the use of fossil fuels and subsequently air pollution. This is in the context of Hanoi, several times this month, being among the cities with the worst air pollution in the world.
With this in mind, this tax cut extension adds to the mixed messages Vietnam has been sending on its carbon reduction commitments.
See also: Rethinking Financing Vietnam’s Clean Energy Transition