Food & Hotel Vietnam is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726

The Ministry of Finance wants to levy a special consumption tax on soft drinks

02/03/2023

In addition to increasing the excise tax on beer, wine and tobacco, the Ministry of Finance once again proposed to put soft drinks into taxable status.

Tax changes for beer, alcohol, tobacco and soft drinks are part of the draft revised Law on Special Consumption Tax, which is being consulted by the Ministry of Finance.

With sugary drinks (soft drinks), the Ministry of Finance proposes to pay excise tax “at an appropriate rate”. This is explained to protect people’s health according to the recommendations of WHO, as well as the policy of the Party and Government and in accordance with international practices.

Several types of sugary drinks are consumed in Vietnam. Photo: Anh Tu

The agency cited data showing that the consumption of soft drinks in Vietnam has increased sharply, sevenfold in 15 years, from an average of 6.6 liters per person in 2002 to 46.5 liters per person in 2017 and 50.7 liters/person in 2018. Consumption of sugary drinks is still increasing. In 2020, the output of carbonated drinks and soft drinks in Vietnam will reach about 3.3 billion liters and 1.5 billion liters.

Another data cited is according to the results of the nutrition survey for the period 2000-2010 and 2010-2020 of the National Institute of Nutrition. The prevalence of overweight and obesity among Vietnamese children has increased rapidly in all ages and regions, urban as well as rural.

Countries have gradually imposed excise taxes on sugary drinks. According to the ministry, in 2012 only about 15 countries, by 2021 there will be at least 50 countries collecting the above tax. In the region, there are 6 countries including Thailand, Philippines, Malaysia, Laos, Cambodia and Myanmar that impose special consumption tax on soft drinks.

“WHO recommends that governments take many actions to encourage people to access healthy food, through tax measures on sugary drinks to guide consumption,” the Ministry of Finance stated.

This is not the first time the Ministry of Finance wants to impose a special consumption tax on soft drinks. In 2014, this idea was also launched with a specific tax rate of 10%, but many ministries and branches disagreed. The Ministry of Planning & Investment and the Ministry of Justice assessed that the tax argument was not really convincing at that time, while the Ministry of Industry and Trade worried about negative impacts on business prospects.

With beer, wine, tobacco, special consumption tax has increased over the years according to the roadmap. From 2016 to 2018, this tax on alcohol 20 degrees or more and beer increased from 55% to 65%. Cigarettes and cigars are subject to a special consumption tax of 75% from 2019, an increase of 5% over the previous 3 years.

But the use of these items in Vietnam, according to the Ministry of Finance, is still high and increasing rapidly. The survey data of the Ministry of Health in 2020 shows that the smoking rate among men is still high (42.3%), not reaching the target of less than 37%.

Similarly, Vietnam is the largest beer consumer in Southeast Asia, the third in Asia. In 2019, the average beer consumption per person is about 47.6 liters, 1.2 times higher than in 2015; spirits and white wine is 3.4 liters.

Therefore, the Ministry of Finance believes that the use of beer, alcohol and tobacco should be further controlled and proposed to increase the excise tax according to the roadmap.

The ministry also assessed that the tax on alcohol and beer in Vietnam is still low compared to the world. According to calculations by the World Health Organization (WHO), the new tax accounts for about 30% of the retail price, while in many countries, the tax rate accounts for 40-85% of the retail price. With tobacco, this rate in Vietnam is over 35%, while that of Thailand 70%, Singapore 69%, Malaysia 57%, Indonesia 51%, and in developed countries such as Australia 62%, Germany 75%, France 80%.

The increase in excise tax must also ensure an increase in the prices of alcohol, beer and tobacco after adjusting to keep pace with income growth and inflation. This agency explained that the purchasing power of wine and beer of Vietnamese people increased sharply due to the rapid increase in income while the price of wine and beer increased very slowly.

“If in 1998, to buy 10 liters of Hanoi Vodka, domestic wine and white wine had to spend respectively 8.2%, 5.9% and 1.6% of GDP/person. By 2014, this rate was decreased to 2.2%, 1.6% and 0.4%”, the ministry cited.

Source: VnExpress

Share this post

Must Read

PRODUCTS EXHIBITION
05/04/2022

You may be interested in

31/08/2023
Sustaining its leading position in the Vietnamese tourism industry, Ho Chi Minh City remains a top travel destination
The Ho Chi Minh City Tourism Department is the main organization driving the tourism industry,...
17/08/2023
Advancing connectivity to elevate Phu Quoc into an exceptional international destination. 
The comprehensive master plan for Phu Quoc city, Kien Giang province, until 2040 defines the...
17/08/2023
Vietnam and South Korea actively stimulate and exchange tourists
In 2023, during the Year of Korean Tourism, efforts will be made to enhance connections between...
17/08/2023
Vietnam’s tourism industry demonstrates significant potential for expansion and advancement.
The Deputy Minister of Culture, Sports, and Tourism in Vietnam, Doan Van Viet, has acknowledged...
17/08/2023
Visa advantage is “great news” for Vietnam tourism 
The Asia-Pacific Tourism Association (PATA) welcomes visa facilitation policies for international...
08/08/2023
The hotel market in Ho Chi Minh City has recovered by more than 92%
According to Savills’ report, in the first half of 2023, Ho Chi Minh City welcomed the...
08/08/2023
Vietnam welcomed over 1 million international visitors in July 2023.
July is the first month that the tourism industry welcomed over one million international visitors...
08/08/2023
Vietnam businesses benefit from tourism recovery
HANOI: The strong recovery of tourism has helped businesses in the industry prosper. However,...
20/07/2023
Nearly 5.6 million international visitors come to Vietnam in first half
Vietnam welcomed nearly 5.6 million international visitors in the first half of this year,...
08/06/2023
Vietnam has 103 restaurants honored by the Michelin Guide.
Michelin Guide has honored 103 restaurants/food stalls, including 4 prestigious Michelin-starred...

Subscribe to Our eNewsletters

    captcha
    BOOK A STAND