MoF proposes extending tax relief to curb inflation risks

Vietnam’s Ministry of Finance (MoF) has proposed extending tax relief measures for petroleum products to reduce risks to inflation through September 30. The draft resolution would keep the zero-rate most-favoured nation import duty, the environmental protection tax, and VAT on petroleum products in place for three additional months. While these exemptions would continue until September 30, the special consumption tax (SCT) on petrol would be reinstated from July 1, with rates set at 10% for mineral petrol, 8% for E5 biofuel, and 7% for E10 biofuel. The MoF cited easing global oil prices after a U.S.-Iran peace agreement and restored shipping through the Strait of Hormuz, but warned geopolitical risks remain. Domestic fuel prices have fallen, with E10 at VND20,750 per liter and diesel at VND23,530, yet still above pre-conflict levels. The MoF projects CPI impact of 0.11 percentage points under the partial extension scenario, versus a larger effect under full tax restoration, and estimates a $604 million budget revenue decline.