Vietnam proposes fuel tax cuts to fight inflation and ease household costs

A bold tax break on gasoline could slash living costs for millions. Will Vietnam's plan to axe fuel levies be enough to tame inflation and revive struggling businesses?

, and Administrator

2026 April 16 . 11:01 AM

2 min read

The image shows a poster with text and a logo that outlines the steps to reduce gas prices at the pump. The text is written in a bold font and the logo is a blue and white circle with a gas pump in the center. The poster is divided into four sections, each with a different step in the process of reducing gas prices. The first step is labeled "Reduce Gas Prices" and is accompanied by a brief description of each step.

Vietnam proposes fuel tax cuts to fight inflation and ease household costs

The proposal would continue the set of temporary measures that reduce several tax components on fuels to zero, measures first introduced under Prime Ministerial Decision 482 issued on March 26.

That decision cut the environmental protection tax on gasoline, diesel and aviation fuel to VNĐ0 per litre, set the special consumption tax rate on gasoline at 0 per cent and allowed businesses to forgo declaring and paying value-added tax (VAT) while still retaining the right to deduct input VAT.

Those measures are currently scheduled to remain in effect until April 15.

Under the finance ministry's draft, the same tax relief provisions would be extended from April 16 through June 30.

The ministry estimates that maintaining the environmental protection tax, VAT and special consumption tax at zero for this period would reduce State budget revenues by about VNĐ7.2 trillion (US$273.4 million).

Under the draft, the measures are framed as emergency and targeted interventions to support macroeconomic stability.

The finance ministry argues that lowering tax burdens on fuels, a critical input across production, transportation and services, helps reduce logistics and production costs, which can in turn lower product prices, bolster competitiveness and assist short-term economic growth.

The ministry also notes that these measures would contribute to inflation control and stabilise macroeconomic conditions while directly easing fuel costs for households, potentially reducing transportation and living expenses and supporting purchasing power.

A provision is included in the draft that would allow the Government to adjust the application period of any resulting resolution if urgent needs arise to ensure socio-economic stability and market order.

When the resolution expires, fuel taxes would revert to the statutory rates set by existing tax laws.

The ministry further said that, with the proposed adjustments, there would be no tax element incorporated into fuel prices. In other words, the relief is intended to be reflected directly in final pump prices rather than accounted for as a deferred tax component. - BIZHUB/VNS