In brief
In a move aimed at boosting the domestic market, Vietnam has set the special consumption tax on gasoline and biofuels to 0% through March 31, 2027. The decision, announced via a government resolution, also preserves existing zero environmental taxes and VAT exemptions. The reduction follows a previous brief pause of the tax from late March to June 2026.
Vietnam has ended the special consumption tax on all gasoline types, setting it at zero percent until March 31, 2027, according to a government resolution approved on Saturday, as reported by Xinhua.
The tax, which took effect on July 1, 2026, ordinarily imposed 10% on regular gasoline, 8% on E5 biofuel, and 7% on E10 biofuel. Under the new directive, these rates are suspended for the next two and a half years.
Earlier this year, the tax had already been paused from late March to June 2026 to help stabilise the domestic market, a move that eased pressure on fuel prices.
While the special consumption tax is now 0%, the environmental protection tax on gasoline and oil products remains at zero Vietnamese dong per litre, and all of these fuels are exempt from value‑added tax reporting and payment until the end of 2026, the report noted.
The decision is expected to reduce the cost of fuel for motorists, delivery services, and industry users, potentially boosting economic activity and encouraging the use of cheaper, locally produced fuels.
Business groups have welcomed the change, citing lower operating expenses and a possible increase in freight volumes. Some analysts warn that the long‑term impact depends on how consumption patterns shift during the tax pause.
The government’s move aligns with broader fiscal measures aimed at supporting the energy sector amid global price volatility.
Consumers will see the tax relief reflected in lower pump prices beginning today, which may translate into savings on daily commutes and commercial transport.
The policy also signals Vietnam’s commitment to maintaining market stability while working toward a more sustainable energy mix in the future.
Vietnamese authorities will monitor the market response during the tax‑free period and may adjust the policy if necessary to ensure continued supply and affordability.
