Vietnam mulls tariff cuts to lower petrol prices

The Ministry of Finance (MoF) has proposed a reduction of the most favoured nation (MFN) tariff on a number of petrol products widely used in industrial production from 20 per cent to 10 per cent in an attempt to bring down the economy's input cost.

In addition, the ministry said it will consider lowering the current tax on ethanol from 15 per cent to 10 per cent for some ethanol products.

The US Grains Council has also recently filed a demand for Việt Nam to bring down tariffs on US ethanol from 15 per cent to 5-10 per cent.

Việt Nam encourages the use of ethanol in making biofuel and the use of biofuel as they are considered to be more environmentally friendly.

The Southeast Asian country imported nearly US$49 million worth of ethanol last year with the US being its largest supplier with 62 per cent of the volume. Under current regulations, ethanol (HS 2207.20.11, 2207.20.19) was set at a 15 per cent MFN tariff.

The ministry said lowering MFN tariffs and tariffs on imported ethanol were effective steps taken to bring down petrol prices in Việt Nam and to help reduce the economy's input cost. In addition, the move has been said to provide a boost to exports, especially to the US.

Meanwhile, State budget collection might experience some minor decreases, according to the ministry.