Deputy Prime Minister Le Thanh Long presents a report on the draft revised Law on Special Consumption Tax – Photo: Quochoi.vn
On the morning of November 22, the National Assembly listened to the report and examined the draft Law on Special Consumption Tax Amendment. Presenting the report, Deputy Prime Minister Le Thanh Long said that this amendment to the Law on Special Consumption Tax aims to expand the collection base, such as adding taxable subjects to soft drinks with alcohol content of over 5g/100ml, applying mixed tax on cigarettes, increasing the special consumption tax rate on alcohol and beer, etc.
Expanding the tax base and taxable subjects
The Government affirmed that the above tax increase will have a stronger effect on reducing the affordability of alcohol and beer products, and will have a better impact on reducing the rate of alcohol and beer consumption and reducing the related harms caused by alcohol and beer abuse.
Examining this draft law, Chairman of the Finance and Budget Committee Le Quang Manh said that the majority of opinions in the committee agreed, but suggested clarifying the concept of "according to Vietnamese standards" to avoid difficulties when implementing with imported goods.
Regarding soft drinks with high sugar content, although agreeing to apply a tax rate of 10%, some opinions said that this level is still too low, not enough to change consumer behavior. Meanwhile, some opinions suggested considering adding this item to the list of subjects subject to special income tax.
According to the delegates, this product is not the main and only cause of overweight and obesity, while adding tax will not only have an adverse impact on the production and business activities of water production enterprises but can also affect supporting industries.
Presenting his opinion in the discussion group afterwards, delegate Nguyen Truc Son (Ben Tre) said that taxing soft drinks with sugar content is necessary, but it is necessary to clearly define what kind of drink it is.
“Is the tax applied to carbonated soft drinks or does it include fruit juice, vegetable juice, and soft drinks? Businesses are very concerned about this issue, whether they will be taxed or not?” – delegate Son asked.
Concerned about unclear tax policy, need a roadmap
Mr. Son cited that in Ben Tre, farmers and businesses producing and processing coconuts are very worried about this unclear regulation. Currently, Ben Tre coconuts account for 70% of the country, although sweet and sugary, they are still natural drinks.
Therefore, the regulation of sugar content needs to be clear, with specific tax rates for the sugar content of the product, instead of taxing the whole package.
“Ben Tre exports coconuts with an annual revenue of 500 million USD, products such as canned coconut water, manufactured coconut milk... So does such a tax think about the development of the industry? We want to protect this product, the coconut garden occupies 80,000 hectares, native trees, industrial, so we need to clarify, general tax will affect agricultural production” – delegate Son said.
Delegate Dang Bich Ngoc (Hoa Binh delegation) agreed with the tax on sugary soft drinks, because this product is one of the causes of overweight, obesity and affects health.
However, Ms. Ngoc said that the draft has not yet carefully assessed the impact of the policy on manufacturing enterprises. Therefore, the drafting agency needs to research, supplement the basis, and clearly stipulate the appropriate sugar content for easy implementation in practice.
Vice Chairwoman of the National Assembly Nguyen Thi Thanh said there is no scientific evidence to fully prove that sugary soft drinks are the main cause of overweight and obesity.
Therefore, although agreeing with the tax, Ms. Thanh believes that there needs to be a roadmap linked to the transformation capacity of businesses, and people gradually changing their perception of consumption.
Tax to raise revenue or adjust consumer behavior?
Regarding the application of tax on beer and alcohol, delegate Tran Thi Hien (Ha Nam) said that the roadmap to 2030 is to increase tax on alcohol and beer by 100%, but the impact of tax imposition on industries has not been carefully assessed.
“It is necessary to determine whether the tax increase will affect local revenue and economic development or not?” – Ms. Hien asked.
Chairman of the Economic Committee Vu Hong Thanh said that the Law on Special Consumption Tax aims to orient production and consumption, but the draft shows that it is focusing on taxing to maintain and increase revenue, not clearly orienting consumption.
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