Perfecting the law on environmental protection tax: International experience and suggestions for Vietnam

Abstract

Tax is one of the most important instruments for regulating both a country’s economy and the behavior of various actors within society. Notably, environmental protection tax stands out as an effective levy in mitigating the adverse environmental impacts of goods production while simultaneously acting as a valuable tool for achieving the sustainable growth objectives of nations. The study adopts legal analysis and comparative approaches, drawing on secondary data from 2015 to 2024, with an emphasis on environmental protection tax policies in Vietnam and representative countries at forefront of this field. This research explores several environmental protection tax policies from countries that are pioneers in this field, such as Sweden, Singapore, South Korea, and member states of the European Union. The study focuses on legal frameworks, tax structures, and preferential tax policies that promote environmentally friendly economic practices. Based on this analysis, the paper provides several recommendations for improving Vietnam’s environmental protection tax system, including expanding the scope of taxable objects, adjusting tax rates to better reflect environmental impact, and introducing specific tax incentives to encourage businesses to invest in green technology. These recommendations are closely grounded in Vietnam’s current socio-economic conditions and are designed to ensure a balance between economic growth and environmental preservation. Ultimately, the study aims to support Vietnam in achieving sustainable development and to lay the groundwork for the country to enter what may be considered a “New era of national resurgence”.