Vietnam Weighs Gasoline Tax Cut and Lower Electricity Prices From November

Vietnam is considering reducing the special consumption tax on gasoline to zero for five months and cutting average retail electricity prices as the government seeks to ease energy costs for households and businesses.

Deputy Prime Minister Nguyễn Văn Thắng instructed the finance ministry on Tuesday, October 27, to review the legal basis, feasibility and effects of temporarily removing the special consumption tax on all gasoline grades. The proposal would apply from November 1, 2026, through March 31, 2027. Current gasoline special consumption tax rates range from 7% to 10%. A review instruction is not equivalent to an enacted tax change, and the final decision and legal mechanism have not been announced.

At the same meeting, Thắng directed state-owned Vietnam Electricity, known as EVN, to recalculate costs and identify savings that could support a lower average retail electricity tariff from November. The proposed adjustment would also run through the end of March next year, subject to the applicable pricing rules and approval process. Officials described consumer relief and social welfare as goals of the review.

The proposals come as Vietnam faces elevated inflation and pressure to maintain rapid economic growth. Annual consumer-price inflation reached 5.08% in September, compared with 4.89% in August, above the government's 4.5% target for the year. The economy expanded 9.95% in the third quarter, but meeting the full-year growth ambition of at least 10% would require an especially strong final quarter.

Reducing taxes on fuel could lower the price paid by drivers and transport-dependent businesses, although the eventual impact would depend on global fuel costs, retailers' pricing and the final tax design. Similarly, an electricity tariff cut could ease operating costs but would need to account for the utility's finances and the regulatory timetable.

The government has not announced the final gasoline tax rate or the size of any electricity price reduction. Both remain proposals under review rather than measures already in force.