Need to relax business

The beverage industry has been experiencing a sharp decline in revenue and profits after Covid-19. Therefore, businesses need to relax to foster confidence and recovery.

On the afternoon of March 15, the Vietnam Beer - Alcohol - Beverage Association (VBA) held a conference "Meeting with VBA member businesses" in Hanoi .

Chairman of the Vietnam Beer - Alcohol - Beverage Association, Associate Professor, Dr. Nguyen Van Viet, affirmed that the beverage industry (beer, alcohol, soft drinks) is an economic and technical sector that has been making important contributions to socio-economic development.

Each year, the whole industry contributes about 60 trillion VND to the State budget, creating millions of direct and indirect jobs for workers. The quality and diverse products of the industry increasingly meet domestic consumption needs and serve exports. The beverage industry is also an important link in the chain of related industries from trade, transportation, restaurants, promoting the development of tourism services and always pioneering in community activities and social security.

However, in recent years, the beverage industry has encountered many difficulties due to Covid-19 and conflicts around the world. Businesses have tried to find ways to overcome difficulties with many solutions to increase resilience, stabilize production, and create jobs for workers. Up to now, the beverage industry has been experiencing a sharp decline in revenue and profit, followed by commercial systems, restaurants, entertainment areas, transportation, and input supply chains that have also been indirectly affected and have seen a significant decrease in revenue of 15-20%, with some indicators even decreasing by 30-40%...

At the conference, experts and business representatives said that the impact of Covid-19 is increasingly showing its smoldering, prolonged effects, causing people's incomes to decrease. They have to tighten spending, only prioritizing essential goods. Meanwhile, in the world, the prices of raw materials, fuel, and transportation have all increased, leading to increased production costs.

These difficulties are still present and have a strong impact on the beverage industry. Businesses will find it difficult to find opportunities to recover and grow again as in the previous period, without breakthrough support policies and solutions from the National Assembly and the Government to fundamentally resolve these difficulties, creating momentum for the business community to recover.

Need to relax business

The issue that received the most attention at the Conference was the story related to the draft law on Special Consumption Tax (amended).

According to CIEM research, a 10% tax increase on beer could cause a significant drop in output (28.3%). This could result in significant economic losses not only for the beer industry but also affect state budget revenues.

Experts also acknowledge that in the context of the market still facing many challenges, decreasing orders, and difficulties for businesses, the current solution is to ease the burden on businesses, continue to strengthen and expand policies to reduce taxes, fees, and payables. Policies expected to be revised in the coming time also need to be carefully considered and evaluated in the current context.

Mr. Dau Anh Tuan, Head of the Legal Department, Vietnam Federation of Commerce and Industry (VCCI), said that according to VCCI's records, the picture of the economy and business health is currently very worrying.

In particular, beverage businesses are suffering double negative impacts from the Covid-19 pandemic along with the impact of the world situation and related policies, leading to difficulties on top of difficulties.

“In this draft law, the beer and alcohol industry will have some impacts in terms of tax increases according to the roadmap, but in the current difficult context, it is possible to propose to delay the schedule of increasing special consumption tax in the coming time,” Mr. Dau Anh Tuan expressed his opinion.

Mr. Nguyen Duy Vuong, Head of External Relations, Heineken Vietnam Brewery Company Limited shared that the economic situation in 2024 is expected to continue to be difficult, so increasing the special consumption tax at this time is not appropriate, leading to serious impacts not only on manufacturing enterprises but also on the supply chain and consumers."

“However, we need to have a more comprehensive and in-depth view of the issue of contributing opinions to amending a tax or a law, for the development of the entire industry, the environment and society, and for long-term prosperity and sustainability. We believe that the current difficulty is only one factor, there are many other important factors that need to be mentioned, studied and considered properly,” Mr. Nguyen Duy Vuong added.

Recognizing that businesses in general and businesses in the beverage sector in particular are in a very difficult period, Ms. Nguyen Thi Minh Thao, Head of the Department of Business Environment and Competitiveness Research (Central Institute for Economic Management Research), recommended that the drafting agency should comprehensively assess the impact when proposing to expand the taxable subjects and increase the special consumption tax.

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