National Assembly to decide on temporary reductions in environmental protection tax, VAT, and excise tax on gasoline, diesel, and aviation fuel from April 16 to June 30

Following the continuation of the legislative session, the National Assembly will vote today on a resolution regulating the environmental protection tax (BVMT), value-added tax (VAT), and excise tax (TTĐB) on gasoline, diesel, and aviation fuel. The proposal would reduce these taxes to their maximum levels, with an application period from April 16 to June 30.

Background and rationale

The government said the Middle East conflict has caused energy prices—especially oil and gas—to fluctuate, disrupting fuel supply and pushing global crude prices higher. It added that these effects have significantly impacted domestic fuel supply and the fuel market, leading to short-term increases in gasoline and diesel prices and affecting production, business operations, and household livelihoods and incomes.

To diversify supply and stabilize domestic fuel prices, the government and the Prime Minister directed the use of policy tools, including reducing BVMT, VAT, and TTĐB from March 26 to April 15.

Recent market movement

At the March 27 operating session, prices of many fuel products fell, with some items down nearly 6,000 VND.

The government described the March 26 to April 15 reductions as a temporary emergency measure while the Middle East conflict continues to unfold and directly affects the domestic gas and oil market.

Key provisions in the draft resolution

The draft resolution proposes reducing BVMT on gasoline (excluding ethanol), diesel, aviation fuel, kerosene, and mazut to 0 VND per liter. For gasoline, diesel, aviation fuel, kerosene, and mazut, these fuels would be outside VAT declaration, while input VAT would remain deductible.

It also proposes cutting TTĐB rates on all types of gasoline to 0%.

The resolution sets the application period from April 16 to June 30 and assigns the Prime Minister to issue specific decisions to adjust the effect of the resolution (shorten or extend) to ensure the domestic fuel market operates in line with global oil price movements.

Legislative discussion and differing views

Before today’s decision, during the previous discussion, delegates agreed with reducing fuel taxes according to the government’s proposal. However, they differed on the timing of the tax reductions.

MP Tran Hoang Ngan proposed extending the application period to the end of 2026 or at least to September 30. He also emphasized preventing price spikes from spreading to other goods when fuel prices fall, and called for inspection and enforcement to ensure price stability and to combat smuggling.

Government response scenarios and reserves

At the April 10 economic and social committee meeting, Industry and Trade Minister Le Manh Hung said the ministry had prepared three response scenarios: scenario 1 ends in four weeks; scenario 2 ends in four weeks plus two; and scenario 3 extends beyond four weeks.

The government also said it has implemented five groups of measures, and that current fuel reserves have increased from 15 to 26 days.

Policy outlook

The government stated that, to ensure macroeconomic stability, curb inflation, and stabilize confidence and living standards, longer-term policies are needed and should be submitted to the National Assembly as appropriate.