Many concerns have been raised regarding the draft amendment to the Law on Special Consumption Tax.

Many are concerned about imposing excise tax on sugary drinks. Photo: Ministry of Finance.

On July 11th, in Hanoi , the Vietnam Chamber of Commerce and Industry (VCCI) organized a workshop to gather feedback on the draft Law on Special Consumption Tax (amended).

The draft has the fewest words, but it has a significant impact on businesses.

The draft Law on Special Consumption Tax (amended) is being prepared by the Ministry of Finance with many important amendments, including the addition of new items subject to special consumption tax, adjustments to tax rates on some items with a specific roadmap, changes to the tax calculation method, and adjustments to some regulations to ensure the consistency of the legal system.

These amendments will have a significant impact on businesses throughout the production, distribution, and consumption chains of goods and services subject to the law, as well as on consumers.

Speaking at the workshop, Mr. Dau Anh Tuan, Deputy Secretary General and Head of the Legal Department of VCCI, expressed that the draft Law on Special Consumption Tax (amended) is perhaps one of the drafts with the fewest words but has a significant impact on businesses and industries.

Will imposing excise taxes help reduce the increase in obesity rates?

Regarding the beverage sector specifically, the Ministry of Finance has not included sugary drinks and soft drinks that meet Vietnamese standards in this draft.

Speaking at the workshop, Ms. Chu Thi Van Anh, Vice President and General Secretary of the Vietnam Beer, Wine and Beverage Association (VBA), said: "Sweetened soft drinks are not the only or highest source of sugar and calories."

This is not the only and primary cause of overweight, obesity, and non-communicable diseases. The Association proposes not to impose excise tax on sugary drinks, as the effectiveness of the tax policy on health protection is unclear while causing significant impacts on the recovery of the beverage industry, affecting employment and the economy in general.

Sharing the same view, Ms. Nguyen Viet Ha, Vice President of the American Chamber of Commerce in Hanoi (AmCham Hanoi), also wondered whether tax tools truly contribute to protecting health and preventing non-communicable diseases such as overweight, obesity, and diabetes.

Ms. Ha cited the example of the Danish government, which abolished the tax on sugary drinks. Upon monitoring the rate of overweight and obesity, she found that the rate did not increase. This is because when the tax was imposed, Danes went to other European markets to buy soft drinks at lower prices, resulting in a loss of 5,000 jobs in Denmark.

Conversely, Associate Professor Dr. Truong Tuyet Mai, Deputy Director of the Institute of Nutrition (Ministry of Health), argues that the goals of protecting people's health are long-term; we cannot expect that what we eat today will immediately affect our health tomorrow. Therefore, implementing tax policies to change people's consumption behavior is a long-term vision, aimed at protecting the health not only of today's population but also of future generations.

Associate Professor Dr. Truong Tuyet Mai, Deputy Director of the Institute of Nutrition (Ministry of Health), speaks at the workshop. Photo: Organizing Committee.

Despite doubling the excise tax, the rate of alcohol abuse continues to rise.

According to a representative of the VBA (Vietnam Beer and Wine Association), beer and liquor businesses have never experienced such a sharp decline as recently, due to the significant impacts of the pandemic, regulations restricting alcohol consumption, and administrative penalties for traffic violations.

Therefore, the recent proposal from the Ministry of Finance, which involves a series of tax increases from 2026 to 2030 to raise selling prices, has shocked businesses, although the basis for this proposal remains unclear.

"We are concerned that the tax increase will lead to an increase in indirect taxes for consumers, especially as they will turn to unregulated, unregulated alcohol that does not aim to protect consumer health. Therefore, the association proposes extending the tax increase schedule to avoid causing shock and allow businesses to adapt," Ms. Van Anh suggested.

Mr. Nguyen Van Phung, a member of the Central Executive Committee of the Vietnam Association of Accountants and Auditors (VAA) and former Deputy Director of the Tax Policy Department (Ministry of Finance), argues that although the excise tax on alcoholic beverages has continuously increased since 2008, alcohol consumption has also continued to increase over the years, indicating that the excise tax has not had a significant impact on changing consumer behavior.

Over a 10-year period (2005-2015), excise taxes doubled, yet the rate of alcohol abuse among the population increased tenfold.

Experts note that it was only with Decree 100/2019/ND-CP dated December 30, 2019, on administrative penalties for traffic violations that it significantly impacted the consumption of alcoholic beverages.

From a business perspective, Mr. Nguyen Thanh Phuc, Director of External Relations at Heineken, proposed applying a tax rate based on the alcohol content in the product.

Firstly, a 65% tax rate applies to beer products with an alcohol content of 5.5% or less.

Secondly, a 70% tax rate applies to beer products with an alcohol content between 5.5% and 15%.

Thirdly, a 75% tax rate applies to beer products with an alcohol content above 15%.

Source: https://laodong.vn/kinh-doanh/nhieu-ban-khoan-ve-du-thao-luat-thue-tieu-thu-dac-biet-sua-doi-1364812.ldo