Vietnam Ministry proposes fuel tax cut extension through 2021

Vietnam’s Ministry of Finance is proposing Prime minister Nguyen Xuan Phuc extend a 30% cut in the jet fuel environmental tax through next year to help struggling airlines, according to a posting on the ministry’s website.

The proposal follows the National Assembly’s approval earlier this month of the government’s plan to provide financial support to national carrier Vietnam Airlines JSC. The government is weighing providing the airline with loan guarantees and allowing its investment arm, the State Capital Investment Corp., to invest in the carrier, which needs about 12 trillion dong ($518 million), state broadcaster VTV has reported.

The National Assembly earlier this year approved a cut in the jet fuel environmental tax to 2,100 dong per liter from 3,000 dong August through December. Extending it to 2021 would reduce tax revenue by about one trillion dong, according to the posting.