Environmental protection tax reduction on aviation fuel to extend through 2021

SGGP
Amid the current complicated situation of Covid-19 pandemic, the Standing Committee of the National Assembly yesterday approved the Government's proposal to extend time for the 30 percent reduction in the environmental protection tax on aviation fuel through 2021. 

Environmental protection tax reduction on aviation fuel to extend through 2021

Previously in July 2020, the Standing Committee of the National Assembly issued the Resolution No.979 on reduction of environmental protection tax on jet fuel from VND3,000 to VND2,100 per liter as of August 1 to December 31, 2021.

According to the statistic figures, the 30-percent reduction in environmental protection tax on aviation fuel according to Resolution No. 979 is predicted to trigger decrease of the environmental protection tax on flying fuel up to VND360 (US$15.5 million) - VND400 billion (US$17 million) for the period of August 1 to December 31, 2020.

However, the environmental protection tax reduction will help aviation businesses ease fuel input costs, contributing to help them offset losses caused by the Covid-19 pandemic and maintain, resume business operations. 

According to the assessment report of the aviation sector, the number of passengers and flights plummeted significantly, causing heavy losses of the Vietnam aviation industry. 

According to Vietnam Airlines, its revenue this year has been calculated to decrease by over VND 40 trillion (US$1.7 billion) over 2019 and the lowest financial loss is predicted to reach VND 15.1 trillion (US$651 million). The cash flow of Vietnam Airlines is expected to be in a cumulative deficit of about VND14.8 trillion (US$638 million).

In the first nine months of 2020, Vietjet Air's revenue also decreased by 72 percent compared to the same period in 2019. It is predicted that its revenue in 2020 would damage over VND3,000 billion (US$129 million). 

With the policy of the environmental protection tax reduction on jet fuel at VND2,100 per liter until December 31, 2021, the State budget will reduce by about VND860 to 960 billion (US$37 to US$41 million).

By Anh Phuong- Translated by Huyen Huong

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