The measure is aimed at promoting the manufacture of more "green" products.
The law covers eight groups of products, including oil and gasoline, coal, plastic bags and chemical substances of restricted use such as herbicides, pesticides, disinfectants and preservatives.
"The imposition of the EPT will help raise awareness for environment protection of the whole society toward environmentally friendly products," said Deputy Minister of Finance Do Hoang Anh Tuan, Viet Nam News reported Thursday.
Oil and gasoline will be taxed at a rate ranging from 0.048 cents to 2 cents per liter under the law, effective Jan. 1, with the ministry estimating that revenues from the fuel tax would reach $572 million in 2012, Viet Nam News reports.
The tax replaces the current environment protection fee applied to oil and gasoline.
The estimated total revenue from the EPT on all products would be $2.7 billion per year.
A joint study on possible impacts of the EPT by the Viet Nam National Economics University and the University of Wisconsin-Madison concludes that industries directly targeted by the tax would be affected because of a 1.7 percent drop in coal production output and an 8.6 percent drop for gasoline, rising transportation costs by 1 percent.
The study also predicts a 0.8 percent drop in gross domestic product in Vietnam in the short run and a rise in inflation between 0.4 percent and 0.7 percent.
The tax comes as Vietnam faces the highest rate of inflation in Asia, with consumer prices rising more than 22 percent last month, marking the 11th consecutive month of increases.
Separately, Denmark said this week it has launched a development aid program focusing on green growth and clean technology in Vietnam, the Danish Embassy in Hanoi announced Tuesday.
"Vietnam needs to work toward focusing more on sustainability and green growth as part of its development model," John Nielsen, the Danish ambassador to Vietnam, said in a statement.
"This is crucial as renewable energy and in general a green growth focus has the potential to deliver millions of new jobs, introduce transfer high value-adding technology to Vietnam, and diversify economic development."
The U.S. Energy Information Administration says half of Vietnam's domestic energy consumption comes from oil. Hydropower supplies about 20 percent of Vietnam's power, coal supplies about 18 percent and natural gas accounts for the remainder.