Associations propose roadmap to increase taxes on alcohol, beer, and sugary soft drinks

There is a thorough impact assessment and calculation of an appropriate tax increase roadmap for alcohol, beer and sugary soft drinks to stabilize business production, contributing to achieving the economic growth target of 8%.

Beer, alcohol and beverage industry faces risk of tax increase - Photo: N.Tri

Many associations including the Vietnam Federation of Commerce and Industry (VCCI), the Association of Foreign Invested Enterprises (VAFIE), the Vietnam Tax Consultants Association (VTCA), and the Beer - Alcohol - Beverage Association (VBA) have just sent documents to National Assembly Chairman Tran Thanh Man, the National Assembly Standing Committee, the Economic Committee and relevant agencies to propose and comment on the draft revised Law on Special Consumption Tax.

Fear of reduced purchasing power due to tax increase

According to VCCI, the adjustment of tax policies, including special consumption tax, needs to be considered carefully and comprehensively. In the context of a record number of businesses withdrawing from the market with 197,000 businesses, the global economy continues to develop complicatedly, with potential risks, to create favorable conditions for production and business, support consumer demand stimulation, and expand the market.

VAFIE believes that the current unfavorable context may affect the 8% growth target. In particular, changes in trade policies of some major export markets may lead to investment shifts away from markets with high tax risks. Therefore, foreign investors expect policies to support production, business, encourage consumption and export.

However, the draft Law on Special Consumption Tax is currently adjusting the tax rate on alcohol and beer to 100% for 5 consecutive years and adding sugary soft drinks to the list of subjects subject to special consumption tax. Therefore, VCCI is concerned that if the tax rate is suddenly adjusted, it may reduce purchasing power, negatively affecting the production and business activities of enterprises and the overall development of the economy.

VTCA believes that the current option will increase taxes rapidly and continuously, causing difficulties for production, trade and catering businesses. Accordingly, it is necessary to carefully study the level of increase, tax rate, as well as a reasonable increase roadmap to ensure the maintenance of production and business activities, jobs for workers... in order to stabilize the market.

In fact, the VBA in its petition to the National Assembly Standing Committee also added that the beverage industry not only meets domestic consumption needs but also serves exports. Currently, there are hundreds of manufacturing and trading factories located in 51 provinces and cities, creating millions of direct and indirect jobs, contributing 60,000 billion VND to the budget (of which special consumption tax is more than 40,000 billion VND).

Support tax increase but need to extend the roadmap

With the viewpoint of supporting, accompanying and being consistent with the need to amend the Law on Special Consumption Tax, VBA wishes to adjust the effective date of this law to 2028; consider reducing the tax increase and extending the increase roadmap, increasing once every two years, each time not exceeding 5% until 2030; not considering adding soft drinks according to Vietnamese Standards (TCVN) with sugar content over 5g/100ml   into taxable subject.

VAFIA also believes that alcohol and beer businesses are also facing many difficulties due to the decline in beer and alcohol consumption, so it is necessary to consider maintaining the current tax rate until the end of 2026 to give businesses time to recover and start the roadmap to increase taxes every two years with an increase of 5% per year, aiming for a maximum increase rate of 80%. At the same time, sugary soft drinks should not be subject to tax or consider a suitable roadmap to minimize the impact.

VCCI also agrees that the tax increase roadmap in the current conditions will be suitable for the endurance of enterprises. Because if the tax is increased too quickly, it will make it difficult for enterprises to have enough time to adjust their business strategies and invest in technology, leading to a reduction in production scale, affecting workers' jobs.

Not to mention that a sharp tax increase will cause smuggling and illegal trade, causing budget losses and affecting consumers' health.

Source: https://tuoitre.vn/cac-hiep-hoi-kien-nghi-lo-trinh-tang-thue-voi-ruou-bia-nuoc-giai-khat-co-duong-20250306094518673.htm