Research on increasing special consumption tax on sugary soft drinks according to roadmap

Photo caption — National Assembly delegate of Ben Tre province Nguyen Thi Le Thuy speaks. Photo: Doan Tan/VNA

The basic opinions agreed with the need to amend the law to implement the Party and State's policies and overcome the shortcomings of the current law. The delegates focused on discussing and giving opinions on many groups of policies and specific provisions in the draft law. These included the content on meeting the objectives of tax system reform; taxable subjects, tax bases, tax rates, roadmap for increasing tax rates, reducing taxes, implementation provisions, etc.

Some opinions expressed concern and suggested that the application of special consumption tax on sugary drinks should be carefully considered. Delegate Nguyen Thi Le Thuy (Ben Tre) said that the application of special consumption tax on sugary drinks could reduce the consumption of sugary drinks but it is unlikely to reduce the rate of overweight, obesity and other non-communicable diseases. Therefore, the delegate suggested that a thorough and comprehensive assessment of the effectiveness of adding sugary drinks to the list of subjects subject to special consumption tax is needed to ensure the goal of protecting people's health.

Also related to this issue, delegate Cam Thi Man ( Thanh Hoa ) expressed concern about adding soft drinks with a sugar content exceeding 5g/100ml, as per Vietnamese standards, to the list of products subject to special consumption tax at a rate of 10%. Accordingly, the delegate agreed with adding this product to the list of products subject to special consumption tax to help guide consumer behavior, expand mechanisms to encourage businesses and consumers to switch to other sugar-free products, and contribute to reducing overweight, obesity, and non-communicable diseases.

However, the impact assessment report states that the beverage industry accounts for 38% of the total number of businesses in the beverage sector. Regarding the impact on budget revenue, calculations show that applying a 10% excise tax would shrink the production scale of businesses. Furthermore, the tax would not only affect the beverage industry but also 24 other industries in a related inter-industry manner. The resulting impact on the entire economy would lead to a decrease in GDP.

Therefore, the representative from Thanh Hoa province argued that it is necessary to balance the goal of guiding consumer behavior with the production and business activities of enterprises trading in the aforementioned goods. The government needs to provide a clearer explanation of the objectives of this policy. Representative Cam Thi Man emphasized that the addition of this policy needs careful consideration to ensure smooth implementation and to allow businesses time to develop business strategies and adapt accordingly.

Contributing opinions to the draft Law, delegate Pham Van Hoa (Dong Thap) proposed to consider increasing the special consumption tax on sugary soft drinks according to the roadmap. This should be studied in the context of businesses facing many difficulties, affecting production and business... According to the delegate, many other goods also have high content, not just sugary soft drinks. If high taxes are applied, there may appear soft drinks, beer and wine that are handmade and smuggled into Vietnam, which is very difficult to control.

In addition, Representative Pham Van Hoa also proposed to the Drafting Committee of the Law that air conditioners should not be subject to excise tax because they are essential goods and necessities for the people.

In his concluding remarks, Vice Chairman of the National Assembly Nguyen Duc Hai stated that, through discussion, delegates agreed on the necessity of amending the Law on Special Consumption Tax to overcome the shortcomings of the current Law, institutionalize the Party's policies, regulate consumption in accordance with the shift in consumption trends in society and the Party and State's orientation on protecting people's health, protecting the environment, in line with tax reform trends in the world.

Delegates also contributed opinions on taxable subjects, tax calculation basis, tax rates, tax increase and reduction schedules; they proposed a review to ensure consistency and a comprehensive and harmonious impact assessment to ensure the relationship between producers, consumers, and social interests, and to utilize various tools. These were heartfelt and responsible opinions from various perspectives, and some concerns were raised regarding certain aspects that require thorough research to finalize the draft Law.

The opinions of the National Assembly deputies have been fully recorded and documented. The Standing Committee of the National Assembly will direct the reviewing agency to closely coordinate with the drafting agency and relevant agencies, incorporating the opinions expressed in the plenary session and the opinions discussed in the working groups to finalize the draft Law, and submit it to the National Assembly for consideration and decision according to the legislative agenda.

Source: https://baotintuc.vn/thoi-su/nghien-cuu-tang-thue-tieu-thu-dac-biet-doi-voi-nuoc-giai-khat-co-duong-theo-lo-trinh-20241127195952630.htm