Among the three options proposed in the draft to increase special consumption tax on beer, businesses and experts said that they should consider postponing the deadline to ensure the harmonious interests of the economy.
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| Overview of the Workshop. (Source: VBA) |
On the afternoon of November 25, the Vietnam Beer-Alcohol-Beverage Association (VBA) in collaboration with the Institute for Strategy and Policy Research on Industry and Trade organized a workshop to announce the "Report assessing the impact of the draft to increase special consumption tax on beer products".
The Law on Special Consumption Tax (SCT) (amended) has been included in the 2025 Law and Ordinance Development Program, added to the 2024 Law and Ordinance Development Program, submitted to the National Assembly for comments at the 8th Session (October 2024) and approved at the 9th Session (May 2025).
In particular, the amended Law is in the direction of adjusting the increase in the special consumption tax rate for beer (currently 65%) with 2 proposed options. Option 1 will increase the tax from 2026, increasing each year by 5% each year until the special consumption tax rate for beer is 90% by 2030. Option 2 will increase the tax from 2026 by 15%, then from 2027 increase each year by 5% each year until the special consumption tax rate for beer is 100%.
In Document No. 28/VB-VBA dated July 1, 2024 of VBA sent to the Minister of Finance for comments on the draft Law on Special Consumption Tax (amended), VBA proposed to postpone the tax increase deadline until 2027; at the same time, increase the tax at 5% and with a roadmap of increasing it every 2 years, up to 80% in 2031, to suit the economic context, business situation and to enable businesses to survive and adapt, thereby mitigating negative impacts on the industry and contributing to socio-economic development.
The tax increase proposed by the Ministry of Finance will have a huge impact on beer businesses. In that context, the Institute for Industry and Trade Policy and Strategy (Ministry of Industry and Trade), the Vietnam Beverage Research Institute, in collaboration with a group of experts from the Central Institute for Economic Management (CIEM) and the General Statistics Office, conducted a study to assess the impact of the increase in special consumption tax on the Vietnamese beer industry.
Research shows that there are currently about 6,600 beverage enterprises nationwide. From 2016 to 2023, each year these enterprises contribute about 48 - 56 trillion VND to the state budget; of which, the beer industry contributes about 70%. Therefore, the beer industry has a very important position and role in generating revenue for the budget through direct taxes from beer production and other amounts through related activities such as retail distribution services, including import and export services.
The study also shows that on average, in the period of 2018-2022, the beverage industry has created nearly 87 thousand direct jobs and millions of indirect job opportunities through more than 5 million households providing restaurant and catering services. Of which, the beer industry contributes more than 50% of the beverage industry's workforce. Accordingly, the income of workers in the beer industry is higher than the average income of workers in the beverage industry and significantly higher than the average income of the manufacturing industry.
Ms. Nguyen Thi Minh Thao, Head of the Business Environment and Competitiveness Research Department (Central Institute for Economic Management - CIEM) said that the research team has implemented 3 options including option 1, option 2 of the Ministry of Finance and the option proposed by VBA. All 3 options affect and reduce the added value of the beer industry.
Assuming that the growth rate of added value in the beer industry is equivalent to the GDP growth rate under scenario 6.5%, with scenario 1, the added value decreases by VND 44,359 billion, equivalent to 9.4%; scenario 2 decreases by VND 61,899 billion, equivalent to 13.12% and scenario 3 decreases by VND 38,329 billion, equivalent to 6.5%.
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| Ms. Nguyen Thi Minh Thao, Head of the Department of Business Environment and Competitiveness Research (CIEM) spoke at the event. (Source: VBA) |
According to Ms. Nguyen Thi Minh Thao, the production cycle of the beer industry is a short-term cycle, in the medium and long-term production cycles, the production of the beer industry and 21 industries in the inter-industry relationship is narrowed, leading to a decrease in state budget revenue. Therefore, the goal of increasing special consumption tax on beer to increase the state budget will not be achieved in the medium and long term.
In particular, workers are also significantly affected by the increase in excise tax on beer. All three options reduce the income of workers in the economy. Therefore, based on the overview and general situation of enterprises, the beer industry is the industry most vulnerable to policy changes.
Sharing at the workshop, Mr. Pham Tuan Khai, former Director of the Legal Department, Government Office, said that in nearly 30 years of working in law-making, building hundreds of law projects, he has not seen any project with such a thorough impact assessment as the study "Assessing the impact of the draft to increase special consumption tax on beer" conducted by a research group of 4 agencies.
“The bottleneck of law-making in our country today is that the law cannot predict future problems. Therefore, our laws are very specific and difficult to implement. This report has comprehensively assessed the impact of the draft law; analyzed and argued appropriately and convincingly; helping the drafting agency not only see the practical picture but also predict the future of the industry,” Mr. Khai assessed.
Mr. Khai said that the Draft Law on Special Consumption Tax (amended) in general and beer in particular should not specify in detail or fix a specific tax increase at a specific time. “The roadmap for the increase should be left to the Government to decide. The Government sees that at this time, with the geopolitical situation and the difficult macroeconomic context, it can postpone the tax increase or speed up the tax increase. It is not necessary to specify the tax increase time in too much detail and specifically in the law,” Mr. Khai suggested.
From a business perspective, Ms. Tran Ngoc Anh, Senior Director of External Affairs of Heineken Vietnam, said that in the context of the economy facing many difficulties and challenges, input materials for manufacturing industries have increased, consumption has decreased... causing businesses to face many difficulties. Therefore, the amendment of special consumption tax needs to be considered comprehensively and thoroughly.
“The research team’s report has a scientific approach, advanced assessment methods, and reliable data. Of the options proposed by the Ministry of Finance, all have impacts on the economy, option 2 has the strongest impact. Therefore, a harmonious option is needed to achieve budget targets, protect health, ensure the business environment, be suitable for the economic context, the current state of businesses, and enable businesses to survive,” said Ms. Tran Ngoc Anh.
Source: https://baoquocte.vn/tang-thue-tieu-thu-dac-biet-doi-voi-nganh-biat-voi-nganh-biat-been-can-hai-hoa-loi-ich-tranh-gay-hieu-ung-nguoc-295089.html
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