Vietnam has temporarily cut environmental protection tax on petrol, diesel and jet fuel to zero under a decision signed by Prime Minister Pham Minh Chinh, as the Government moves to stabilise the domestic fuel market and safeguard energy security.

At a Petrolimex gas station.

Under the decision taking effect from March 26 midnight through April 15, petrol, diesel and jet fuel will also be exempt from value-added tax (VAT) declarations and payments, while still permitting firms to claim input VAT deductions.

The special consumption tax on petrol has also been set at 0%.

The tax cuts, seen as an urgent and effective step, came as tensions in the Strait of Hormuz, described as the world’s largest energy chokepoint, have disrupted global oil flows and driven up prices, threatening Vietnam’s fuel supply.

The cuts are expected to ease the burden on households and help firms sustain production and trade, even as it trims state budget revenue by an average of about 7.2 trillion VND (276.9 million USD) per month.

Distributors and importers will not need to declare or pay VAT on these fuels, though other uncovered tax rules will remain in force under existing laws.

The Government must report any adjustments to fuel tax rates to the National Assembly by March 30.

The decision followed the Government's Resolution 68/NQ-CP issued on March 26, which authorises the Prime Minister to apply tax reductions on petrol, diesel and jet fuel when required to serve national interests.

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