The Ministry of Finance proposes a number of measures to control inflation

Facing the pressure of inflation, which tends to increase, the Ministry of Finance and other ministries and branches have also implemented and implemented many solutions, including reducing environmental protection tax on gasoline and VAT.

The Ministry of Finance is also planning to continue to submit to the Government and the National Assembly Standing Committee to reduce a number of taxes and price management solutions related to gasoline to limit the inflationary spiral.

Contrary to the expectations of many international organizations for a strong economic recovery in 2022, the global economy is facing many great impacts from the double shock of the COVID-19 pandemic and the Russian conflict – Ukraine.

XOil prices continued to increase, leading to high inflation.

Most recently, the World Bank lowered its growth forecast for advanced economies sharply to 2.6%. And developing and emerging economies only reached 3.4%. Globally, the World Bank has lowered its economic growth forecast for this year by 1.2 percentage points to 2.9%.

While global growth forecasts have repeatedly warned of a downward trend, inflation has continued to go up. The International Monetary Fund said that the inflation rate in advanced economies will be at 5.7%, while developing and emerging economies will be 8.7% this year, significantly higher. compared with previous forecasts.

The data of countries announcing CPI in April 2022 and May 2022 show that inflation in many countries continues to be high: US CPI in April 2022 increased by 8.3%, continuing to be at the highest level in the past year. Over the past 40 years, the CPI of the Euro Area in May 2022 increased by 8.1%, 4 times higher than the 2% inflation target of the European Central Bank. In Asia, CPI in May 2022 of Korea increased by 5.4%, Thailand by 7.1%, Indonesia by 3.55%; China’s CPI in April 2022 increased by 2.1%, faster than expected compared to the target inflation rate of 3% in 2022, Singapore increased by 5.4%,

In Vietnam, CPI in May 2022 increased by 0.38% over the previous month, by 2.86% over the same period last year. On average, in the first 5 months of 2022, CPI increased by 2.25% over the same period last year, higher than the increase of 1.29% in the first 5 months of 2021, but lower than the increase of the first 5 months of 2017-2020.

In order to stabilize the market, in the period before and after Tet, in June 2022, the Ministry of Finance has issued directives and dispatches to ministries, branches and localities to strengthen the management, administration and stabilize market prices quickly and control inflation in a timely manner. As soon as there were signs of inflationary pressure, many policies were promptly adjusted such as reducing VAT by 2%; 50% reduction of environmental protection tax for jet fuel, 50% – 70% reduction of environmental protection tax for petroleum products, reduction of 37 fees and charges in the first 6 months of 2022 according to regulations in Circular No. 120/2021/TT-BTC; at the same time flexibly use the price stabilization fund tool; continue to extend the deadline for paying taxes and land rents; strengthen inspection and control of petroleum supply and demand to prevent activities of hoarding, speculation and manipulating prices.

Due to the above timely solutions, the average CPI in the first 5 months of 2022 increased by 2.25%, there is still room for inflation control for the whole year according to the target set by the National Assembly at 4%.

In the context that domestic and foreign gasoline prices have continuously increased recently, the Ministry of Finance is coordinating with relevant agencies to study options on the possibility of continuing to reduce environmental protection tax for petroleum products. to contribute to timely curbing inflation.

Deputy Minister of Finance Nguyen Duc Chi said that the Ministry of Finance is currently planning to propose to the National Assembly Standing Committee within its authority to minimize environmental protection tax on petroleum.

In addition, recent developments have shown that the world petroleum market will have many unpredictable and unpredictable fluctuations, potentially affecting the petroleum supply of our country. Accordingly, on April 21, 2022, the Ministry of Finance issued Official Letter No. 3662/BTC-CST to ask for opinions from relevant ministries, local branches, associations and businesses on the draft Decree on Export Tariffs. , Preferential import tax schedule, in which it is proposed to reduce the preferential import tax rate on gasoline from 20% to 12%. The adjustment and reduction of the preferential import tax rate (MFN) for gasoline products according to the plan is expected to contribute to diversifying petroleum supply (avoiding being passive by depending on import sources from Korea and ASEAN). ), and at the same time ensure that the difference is consistent with the tax rate under the Free Trade Agreements that Vietnam has signed. Currently, the Ministry of Finance is synthesizing opinions of units and submitting to the Government in the coming time.

To proactively respond to challenges in price management in the remaining 7 months of 2022, ministries, branches and localities need to actively promote the implementation of solutions that the Government directs and operates. Focusing on the following measures: Continue to implement proactive and flexible monetary policy, closely coordinate with fiscal policy and other macroeconomic policies to control inflation according to the set target. ; To step up the synthesis, analysis, forecasting, and pre-elaboration of scenarios and response plans for each commodity in case goods on the world market continue to increase in order to control production in the near future. water, balance and manage supply and demand, stabilize prices appropriately;

Focus on removing difficulties for production and business to prepare a full supply of goods to meet consumer demand, and facilitate the circulation and distribution of goods and services; For goods and services that are priced by the state, but have not yet considered adjusting prices, continue to keep prices stable to ensure overall inflation control as well as contribute to supporting businesses and people. ; The People’s Committees of provinces and cities shall perform the state management of goods according to their competence, strengthen the inspection and supervision of the implementation of measures to declare prices and list prices; publicize information on prices; strictly handle cases of speculation, hoarding and unreasonable price increase; Continue to focus on information, propaganda, publicity and transparency of price information to control inflation expectations; limit false information that causes confusion for consumers, causing market instability.

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