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General equilibrium economy-wide impacts of the increased energy taxes in Vietnam

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  • Nong, Duy

Abstract

The Vietnamese Government is proposing a new tax levy on either petroleum products or coal, or both. That is, the Government expects to increase the current tax rates to the maximum levels set previously. In this instance, the tax on coal is intended to increase by 50%, while the tax on petroleum products is intended to increase by 33.33%. This study employs a computable general equilibrium model to assess the effects of these increases in taxes on the Vietnamese economy, focusing on energy, transportation, and the private sectors. Results show that an increase in tax on petroleum products will considerably affect the country with a reduction of real GDP by 1.99%. Exports and imports are also highly unfavorably affected. In this instance, the total emission level will be reduced by 7.12%. The increased tax on coal, however, will allow Vietnam to experience much lower unfavorable effects, while being able to cut a substantial amount of the emission level. For example, real GDP would only decline by 0.51%, while total emission level will be reduced by 10.25%. If these taxes are increased together, Vietnam will experience considerable contractions in the economy, but it is able to reduce a substantial emission level.

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  • Nong, Duy, 2018. "General equilibrium economy-wide impacts of the increased energy taxes in Vietnam," Energy Policy, Elsevier, vol. 123(C), pages 471-481.
    • Handle: RePEc:eee:enepol:v:123:y:2018:i:c:p:471-481
    DOI: 10.1016/j.enpol.2018.09.023
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    Cited by:

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    4. Nong, Duy & Wang, Can & Al-Amin, Abul Quasem, 2020. "A critical review of energy resources, policies and scientific studies towards a cleaner and more sustainable economy in Vietnam," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    5. Nong, Duy, 2020. "Development of the electricity-environmental policy CGE model (GTAP-E-PowerS): A case of the carbon tax in South Africa," Energy Policy, Elsevier, vol. 140(C).
    6. Fery Andrianus & Hefrizal Handra & Putri Ayu & Pipin Dwi Safitri & Ria Vinola K. Cahyadi, 2024. "The Impact of Implementing a Carbon Tax on Welfare: Case Study of Indonesia and The Other ASEAN Member Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 647-657, May.
    7. Nong, Duy & Nguyen, Duong Binh & Nguyen, Trung H. & Wang, Can & Siriwardana, Mahinda, 2020. "A stronger energy strategy for a new era of economic development in Vietnam: A quantitative assessment," Energy Policy, Elsevier, vol. 144(C).
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    9. Xiue Li & Zhirao Liu & Tariq Ali, 2024. "Energy–Economy–Carbon Emissions: Impacts of Energy Infrastructure Investments in Pakistan Under the China–Pakistan Economic Corridor," Sustainability, MDPI, vol. 16(23), pages 1-26, November.
    10. Boqiang Lin & Zhijie Jia, 2020. "Supply control vs. demand control: why is resource tax more effective than carbon tax in reducing emissions?," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-13, December.
    11. Siriwardana, Mahinda & Nong, Duy, 2021. "Nationally Determined Contributions (NDCs) to decarbonise the world: A transitional impact evaluation," Energy Economics, Elsevier, vol. 97(C).
    12. Naomi Tan & John Harrison & Mark Howells, 2024. "Comparing Long-Term Power Sector Pathways in Viet Nam: A Simple Cost-Optimization Approach with OSeMOSYS," Energies, MDPI, vol. 17(23), pages 1-24, December.
    13. Nguyen, Phuong Anh & Abbott, Malcolm & Nguyen, Thanh Loan T., 2019. "The development and cost of renewable energy resources in Vietnam," Utilities Policy, Elsevier, vol. 57(C), pages 59-66.
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    15. Bakkensen, Laura & Schuler, Paul, 2020. "A preference for power: Willingness to pay for energy reliability versus fuel type in Vietnam," Energy Policy, Elsevier, vol. 144(C).
    16. Tri Purwaningsih, Vitriyani & Widodo, Tri, 2019. "Applying Tax Rate of 33,33% on Primary Energy in Indonesia," MPRA Paper 91315, University Library of Munich, Germany.

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