Proposal to increase special consumption tax according to roadmap
A series of Vietnamese beer production enterprises have sent a petition letter to Prime Minister Pham Minh Chinh, Deputy Prime Minister Le Minh Khai, the Minister of Finance, the Minister of Justice, the Central Economic Committee, and the National Assembly's Economic Committee regarding the draft Law on Special Consumption Tax (amended).
Businesses proposed to maintain the current tax calculation method and increase special consumption tax according to the roadmap to suit the beer market situation and socio-economic conditions of Vietnam as well as WHO recommendations.
At the same time, it is recommended not to apply option 2, which means adjusting the tax increase by applying a mixed tax calculation method (applying both relative tax according to the percentage rate and adding an absolute tax rate for alcohol and beer) to increase the price by at least 10%.
"If option 2 comes into practice, it could lead to unfair competition in the beer industry in the Vietnamese market, with only the leading enterprises with the highest selling prices and profits benefiting from this policy.
This is contrary to the spirit of the Competition Law, which states that the State ensures an equal business environment," businesses said.
On the other hand, the state budget will also not be guaranteed due to the impact of tax revenue from Vietnamese beer brand manufacturing enterprises, due to reduced production and even bankruptcy.
When their competitiveness is reduced due to increased tax costs, unfair competition and unchanged selling prices, Vietnamese beer brands are forced to reduce production, revenue and profit decline inevitably leading to a decrease in budget revenue, from which the consequences for the economy are even more dangerous.
Along with that, applying option 2 also takes away the right to choose to consume Vietnamese branded products, with quality that meets international standards and prices suitable for the majority of Vietnamese people.
In addition, there is a risk that foreign beer brands will take advantage of the opportunity to dominate the market, turning Vietnam into a monopoly market to consume their products after "defeating" businesses with Vietnamese beer brands.
Considerations when choosing a tax calculation method
Sharing his views on this issue, National Assembly delegate Pham Van Thinh - Member of the National Assembly's Economic Committee - said that tax policy can directly affect the production and business situation of enterprises, so the principle of fairness must be ensured for all enterprises, regardless of size.
Delegates suggested considering the choice of tax calculation method , needing to conduct thorough research on necessary and sufficient conditions, clearly analyzing and evaluating the problem of benefits and costs to propose the most appropriate tax calculation method in each stage of development.
"It is necessary to more clearly evaluate whether the current method of calculating special consumption tax is good enough to achieve the goal of limiting the use of alcohol and beer and ensuring a competitive environment for small and medium-sized enterprises. If we cannot achieve those goals, we need to consider changing the method," Mr. Thinh emphasized.
According to Mr. Thinh, to limit the use of beer and alcohol, it is necessary to adjust the tax percentage and other State management measures to handle people who use alcohol and beer outside of the age limit, participate in traffic... That cannot be considered the main reason to increase taxes, affecting the business activities of enterprises.
"Any solution that creates a healthy competitive business environment for businesses in the beer industry should be prioritized," National Assembly delegate Pham Van Thinh emphasized.
In addition, in the context of a difficult economy, businesses are heavily affected by the consequences of the COVID-19 pandemic, causing the beer industry's revenue and profits to plummet, delegates said that special consumption tax should not be increased at this time.
Regarding this issue, National Assembly delegate Pham Van Hoa - member of the National Assembly's Law Committee - said that the current tax calculation method should be maintained and special consumption tax should be increased according to a roadmap in line with WHO's recommendations.
"Maintaining the current tax calculation method and increasing special consumption tax according to the roadmap is suitable for businesses and the current economic context," said the delegate.
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