The Ministry of Finance (MoF) has proposed the Ministry of Natural Resources and Environment (MoNRE) and the Ministry of Transport (MoT) impose an environmental protection charge on luxury motor vehicles with an engine capacity exceeding 3 liters.

A Prime Ministerial decision assigned MoF to conduct research and recommend environmental charges on such vehicles as they consume large amounts of fuel and discharge large amounts of emissions into the environment.

In the middle of last year environmental protection taxes on gasoline were increased by 300 per cent, from VND1,000 to VND3,000 per liter and on diesel from VND500 to VND1,500 per liter from May 1.

The special consumption tax on vehicles is also to be amended.

From July 1, 2016, the tax rate on vehicles of less than 1.5 liters will be cut from 40 per cent to 35 per cent and on vehicles from 1.5 to 2 liters from 45 per cent to 40 per cent.

Those on vehicles with capacity from 2.5 to 3 liters, meanwhile, will increase from 50 per cent to 55 per cent and on vehicles from 3 to 4 liters cars from 60 per cent to 90 per cent, from 5 to 6 liters from 60 per cent to 130 per cent, and more than 6 liters from 60 per cent to 150 per cent.

On January 1, 2016 special consumption taxes were again amended and determined based on the wholesale price.