VINACHEM

As Vietnam considers implementing a carbon tax, experts are divided over its potential benefits and drawbacks. While some believe it will help reduce emissions, others warn of potential economic harm.

There are differing opinions on whether Vietnam should introduce a carbon tax. Dr. Nguyen Thanh Nga, Deputy Director of the Institute for Financial Strategy and Policy at the Ministry of Finance, noted that while a carbon tax has been implemented in many countries to reduce greenhouse gas emissions, Vietnam already imposes several environmental taxes and fees, such as the environmental protection tax and special consumption tax, aimed at mitigating emissions. She emphasized the need for careful consideration to avoid overlapping tax burdens.

At a recent forum titled "Realizing Vietnam's National Strategy for Green Growth: Promoting Green Capital Flows" in Hanoi, Dr. Nga highlighted the global examples of carbon taxes, such as:

- France, which introduced a carbon tax in 2014 at 7 EUR/ton of CO2, planning to raise it to 100 EUR/ton by 2030.

- The UK, which began taxing carbon at 4.94 GBP/ton in 2013, with an increase to 18.08 GBP/ton expected by 2025.

- Australia, which has applied a carbon tax of 26 USD/ton since 2012.

Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competition, supports the idea, arguing that carbon taxes can help market mechanisms function more efficiently by limiting emissions. However, he cautioned that setting tax rates too high could negatively impact business activity.

He referenced the Laffer Curve, an economic principle suggesting that beyond a certain point, increasing taxes could actually lead to reduced tax revenue.

In contrast, Quan Duc Hoang, a board member at Amber Fund Management, opposes the idea of a carbon tax. He suggested that rewarding companies for good environmental practices would be more effective than punitive taxes. He argued that incentives could motivate businesses to reduce emissions, whereas taxes might lead to tax evasion.

The debate over carbon taxation in Vietnam reflects the broader challenge of balancing environmental goals with economic growth. Experts are divided on whether a carbon tax would help Vietnam meet its green growth objectives or impose unnecessary burdens on businesses.   – Source: VNN –