In brief
Vietnam has lowered the special consumption tax on all gasoline types to zero percent until March 31, 2027, following a government resolution. The 10% tax on regular gasoline and lower rates on E5 and E10 biofuels are suspended while environmental protection and VAT exemptions remain in place.
On Sunday, the Vietnamese government announced that the special consumption tax on all types of gasoline has been suspended to zero percent and will remain so through March 31, 2027, a move reported by Xinhua. The resolution, which came after a vote by the National Assembly, eliminates the 10 percent tax on regular gasoline and the 8‑percent and 7‑percent taxes on the E5 and E10 bio‑fuel variants that had been in effect since the special consumption tax law took effect on July 1 of the same year.
Previously, the government had temporarily lifted the gasoline tax from late March through June 2026 to help stabilize the domestic fuel market amid price fluctuations. With the new resolution, the tax removal is extended to the end of the fiscal year, allowing both motorists and businesses that rely on gasoline-powered equipment a period of lower operating costs.
The decision does not affect other fiscal measures tied to gasoline. The environmental protection tax on gasoline and oil products continues to be zero Vietnamese dong per liter, and the fuel products remain exempt from value‑added tax declaration and payment under a policy that extends through the end of 2026, Xinhua noted.
For consumers, the removal of the consumption tax means a direct reduction in the cost of gasoline at the pump. Regular gasoline, which typically carries a 10 percent surcharge, will no longer include this tax, potentially lowering retail prices by up to a tenth of the pre‑tax amount. The E5 and E10 blends, already subject to lower rates, will enjoy further savings of 8 and 7 percent respectively, if those rates were applied.
The industry response has been cautiously optimistic. Fuel distributors anticipate smoother cash flow as the tax waiver reduces the need for surcharge billing. Transport companies that operate fleets of diesel‑fueled trucks and motorcycles stand to benefit from lower purchasing costs, though those reliant on gasoline-powered vehicles will see more immediate savings.
From an institutional perspective, the tax suspension reflects a balancing act between fiscal revenue generation and market stability. The special consumption tax has historically contributed a significant portion of the national budget, and its removal could shorten the tax gap that the Ministry of Finance seeks to close. However, the temporary nature of the waiver, set to expire in early 2027, indicates a strategic plan to mitigate long‑term financial impact.
Government officials argue that the measure was prompted by spikes in international oil prices and supply chain disruptions, which had pressured domestic fuel prices upward. By cutting the consumption tax, authorities aim to cushion consumers from volatile price swings while supporting businesses that depend on fuel for production and logistics.
Public advocacy groups and consumer watchdogs have welcomed the move, stating that it eases the burden on lower‑income households. Others voice concern about potential shortfalls in public revenue and the need for transparent accounting of how the lost tax income will be compensated.
An oversight mechanism has been included in the resolution: a review meeting scheduled for mid‑2027 will reassess the fuel market conditions and the fiscal impact of the tax suspension. This represents a form of public accountability that allows lawmakers to strike a compromise between immediate economic relief and long‑term budgetary health.
The temporary tax reduction also aligns with Vietnam's broader energy strategy. While the environmental protection tax remains zero, the government underscores its commitment to keep fuel prices affordable as a prerequisite for continued economic growth and to avoid social unrest over rising living costs.
As of now, no court rulings or legal challenges have been filed against the tax waiver. The Ministry of Finance maintains that the resolution complies fully with the special consumption tax law and national fiscal policy, thereby ensuring legal sustainability.
When the tax waiver lingers through March 2027, all stakeholders—fuel distributors, transport firms, consumers, and the state—will continue to monitor the balance between tax revenue and market stability. The approach underscores a common theme in Vietnamese public policymaking, where short‑term fiscal concessions are used to manage market volatility while longer‑term financial stability remains a guiding objective.
