Illustrative Photo: Internet.

Harmonizing interests

At the Government press conference on the afternoon of March 3, Mr. Nguyen Duc Chi, Deputy Minister of Finance, said under the direction of the Prime Minister, the Ministry has sent a document to the Government and relevant ministries and agencies to gather opinions on the draft Resolution on green tax reduction for petrol and oil.

Accordingly, the green tax for petrol and oil is expected to fall by VND1,000/ liter from VND4,000 to VND3,000/liter. The green tax reduction for oil products is VND500/liter, diesel VND1,500/liter, kerosene VND500/liter, fuel oil VND1,500/liter, lubricant VND1,500/liter, and grease VND1,500/kg.

With such a reduction, the price of petrol (excluding ethanol) may reduce by VND1,100 /liter (including VAT). The price of diesel, fuel oil, lubricating oil and kerosene may reduce VND550/liter and the price of grease may drop VND550/kg.

Mr. Chi said, if it is assumed that the petroleum consumption in 2022 is similar to 2019, the green tax revenue will fall by VND14,524 billion, VAT revenue will drop VND15,976 billion and the budget revenue will decrease by VND1,331 billion on a monthly basis. If this policy is applied from April 1, 2022, the budget revenue will fall by about VND11,982 billion.

According to the Deputy Minister of Finance, with the current retail prices, the tax reduction will help reduce the average CPI by 0.6-0.7%. This policy will contribute to harmonizing the interests of people and businesses, helping to reduce production costs and consumption costs.

"This is just a draft, which is currently with relevant ministries and agencies, and it is hoped that it will receive many comments and suggestions to report to all levels for a suitable revision plan," said Deputy Minister Nguyen Duc Chi.

Three groups of solutions to curb inflation

Regarding solutions to curb inflation before the impact of price hikes of input fuels, the Deputy Minister of Finance said the Steering Committee for Price Management had a meeting to discuss and agree on solutions.

Accordingly, in order to cope with the challenge of price management, ministries, Governmental and local agencies should seriously implement the Government’s Resolution 01 and the Price Management Steering Committee and the Ministry of Finance have proposed three groups of solutions, including:

Flexibly and proactively coordinating monetary policies, coordinating fiscal policies to remove difficulties for production and business; flexibly and effectively using tools for price management and market stabilization and strengthening management of price declaration and listing, and strictly handling violations of the law on prices.

Regarding the management of prices of necessities, ministries and agencies should closely monitor price fluctuations, balance supply and demand, and stabilize prices. Ministries and agencies should not consider price adjustments for items which prices are defined by the State prices until the end of the second quarter of 2022 and prepare to meet all conditions and policies to actively adjust prices flexibly at an appropriate time.

Mr. Nguyen Duc Chi said the Ministry of Finance has also proposed many groups of solutions for each agency and field. For example, for petroleum products, the Ministry of Industry and Trade is required to work with the Ministry of Finance to closely follow price movements, contributing to controlling inflation and taking appropriate measures to ensure supply. The Ministry of Health is required to monitor the prices of medical products and products for pandemic prevention.