Vietnam to Cut Tax on Lubes, Greases


Vietnam to Cut Tax on Lubes, Greases
Engineers work on a car body on the assembly line at an automobile manufacturing planet in Haiphong, Vietnam, in May 2021. © NamLong Nguyen

Vietnam plans to slash its environmental protection tax on lubricants and greases by about one-third to help companies cope with the rising cost of raw materials and to support the growing automotive industry.

On June 19, the Ministry of Finance proposed a draft resolution to reduce the environmental protection tax on lubricants from 1,000 Dong (U.S. 4 cents) to ₫300 per liter and on greases to ₫300 per kilogram. If approved, the lower tax will be in place from Aug. 1 to the end of the year. 

Get alerts when new Sustainability Blog articles are available.


The government is expected to discuss the draft resolution at the National Assembly Standing Committee in mid-July.

This is the second time the government is reducing the tax this year. In March, the government approved a 50% tax reduction, putting the rate for lubricants at ₫1,000 per liter and the rate for greases at ₫1,000 per kilogram.

In May, motor vehicle sales in the country jumped 78% year-on-year to 39,469 units. Sales for passenger cars totaled 32,873 units, commercial vehicles 6,174 units and special purpose vehicles (dump trucks, ambulances and others) 422, according to figures released by the Vietnam Automobile Manufacturers’ Association on June 13.

The growth rate of Vietnam’s lubricants industry is usually between 8% and 10%, with more than half consumed in southern Vietnam and the rest in the north and central regions. Annual demand for the entire country is currently 90,000 tons, according to the Vietnam Petroleum Association.

Sales of motor vehicles in Southeast Asia have been growing for the first four months of this year, according to data released by the Asean Automotive Federation. Total motor vehicle sales increased 16.1% to 1.1 million units compared to the first four months last year. Motorcycles and scooters dropped slightly by 1.2% to 1.3 million units compared to the same period last year. 

Related Topics

Finished Lubricants    Market Topics    Region    Southeast Asia    Vietnam