(PLVN) - The revised Law on Special Consumption Tax (SCT) is expected to be passed at the National Assembly session in May 2025. Many comments from relevant ministries, branches, units and enterprises have been sent to the drafting agency and the National Assembly, including recommendations to carefully consider the implementation roadmap.
 |
| Illustration photo. |
(PLVN) - The revised Law on Special Consumption Tax (SCT) is expected to be passed at the National Assembly session in May 2025. Many comments from relevant ministries, branches, units and enterprises have been sent to the drafting agency and the National Assembly, including recommendations to carefully consider the implementation roadmap.
In the latest comments of the Vietnam Federation of Industry and Commerce (VCCI) on amending the Law on Special Consumption Tax, this agency affirmed that in the current challenging economic context, tax policy adjustments, especially special consumption tax, need to be considered carefully and comprehensively, to create more favorable conditions for investment, production, business, support consumer demand stimulation and market expansion.
“The sudden and high increase in excise tax in both options of the draft law may cause many negative impacts and should be considered more carefully. In addition, there is no clear evidence that a sharp increase in excise tax will significantly reduce consumer behavior. Instead, consumers may switch to unofficial products or cut spending in other areas to maintain current consumption levels,” the VCCI document emphasized.
More specifically, VCCI stated that in the draft Law on Special Consumption Tax (amended), the two options for adjusting the special consumption tax on tobacco products both maintain the relative tax rate (75%) and apply the absolute tax rate from 2026. Specifically, option 1 stipulates the starting absolute tax rate of VND 2,000/pack, increasing by VND 2,000/pack each year, reaching VND 10,000/pack by 2030; meanwhile, option 2 applies VND 5,000/pack from 2026, increasing by VND 1,000/pack each year, also reaching VND 10,000/pack by 2030. This aims to raise the tax rate on retail price to 59.4% compared to the current level of 36.7%.
However, considering the practical operations of the Vietnamese tobacco industry, the difficulties in the business environment and consumer trends, businesses believe that the tax increase under both options is too high and unprecedented, which could lead to the risk of closure and bankruptcy of many domestic businesses. Previously, the special consumption tax on cigarettes was adjusted according to a stable roadmap with each adjustment increasing by 5%. The sudden increase to 42% (according to option 1) or more than 100% (according to option 2) in 2026 will not only cause a sharp increase in selling prices but also create conditions for smuggled cigarettes to evade taxes to increase significantly.
According to VCCI, international experience shows that countries such as Australia, Malaysia, Indonesia, the Philippines and some European countries have recorded a more than two-fold increase in the amount of smuggled cigarettes after a sudden tax increase. Along with that is a significant decrease in the market share of legal cigarettes. This situation not only causes budget losses but also negatively affects legal manufacturing enterprises, forcing many units to reduce production scale or even stop operations.
Therefore, tobacco businesses proposed a more reasonable adjustment roadmap, specifically: the absolute tax rate starting in 2026 is 2,000 VND/pack, then increasing by 2,000 VND/pack every two years, with a maximum of 6,000 VND/pack in 2030. VCCI proposed applying this tax rate according to a spread-out roadmap, starting to increase the tax from 2028 to ensure feasibility, avoiding negative impacts on production activities, markets and state budget revenue.
In addition to tobacco, VCCI believes that the draft Law on Special Consumption Tax (amended) proposes to increase the tax rate on double-cabin pickup trucks (pickups) which is not really suitable for the general context of the current automobile market. Because pickup trucks mainly serve the transportation of goods, small and medium-sized businesses, as well as official duties of functional agencies, especially in non-urban areas.
Source: https://baophapluat.vn/can-can-nhac-that-ky-lo-trinh-tang-thue-tieu-thu-dac-biet-post542575.html
Comment (0)