National Assembly delegates worry that coconut water will also be taxed, Deputy Prime Minister reassures

Delegate Nguyen Thi Kim Thuy (Da Nang) – Photo: Quochoi.vn

On the afternoon of November 27, at the discussion session in the hall about the Law on Special Consumption Tax (amended), the imposition of special consumption tax on sugary soft drinks received many mixed opinions from National Assembly deputies.

Adding areas subject to special consumption tax, but need to clarify the subjects

Agreeing to add sugary soft drinks according to Vietnamese standards (TCVN) with sugar content over 5g/100ml to the group of subjects subject to special consumption tax, delegate Nguyen Thi Kim Thuy (Da Nang) said that this is a measure to guide consumer behavior, limiting the abuse of sugary substances that are harmful to health.

However, Ms. Thuy believes that the law should expand the scope of the special consumption tax to sugary drinks in general instead of sugary soft drinks. Also, this tax proposal could have the opposite effect, causing consumers to misunderstand that only sugary soft drinks are not encouraged to use, while many other drinks contain higher sugar content.

Delegate Cam Thi Man (Thanh Hoa) also agreed to add this product to the list of subjects subject to special consumption tax to help guide consumption. This will expand the mechanism to encourage businesses and consumers to switch to other sugar-free products, contributing to limiting overweight, obesity and non-communicable diseases.

However, the impact assessment research report stated that the beverage industry accounts for 38% of the number of enterprises in the beverage industry. Applying a 10% special consumption tax will reduce the scale of production, affecting not only the beverage industry but also 24 other industries, thereby affecting the entire economy.

“The government needs to explain more clearly the goal of achieving this policy. Is it actually to protect people's health or just to increase budget revenue? Therefore, the policy supplement needs to be carefully considered for smooth implementation. Enterprises have time to develop business strategies and adapt promptly,” said delegate Man.

Coconut water is also taxed

Citing the Ministry of Finance's impact assessment report on soft drink consumption, delegate Nguyen Thi Le Thuy (Ben Tre) said that from 2013 to 2020, the average increase was 3.2 liters/person/year. In 2021 alone, this rate decreased 5 times the average increase rate in the past 7 years, even though the tax has not been applied.

Meanwhile, the report also did not assess the impact of sugary beverage consumption in obese or overweight people, or sugar content higher than 5g/100ml consumed by obese people each year.

She cited canned coconut water, which does not need to be added with sugar, as natural coconut water already has a sugar content equivalent to 6-7g/100ml. According to Vietnamese standards, fruit juice in general and canned coconut water in particular can be classified as subject to special consumption tax, while this is a healthy drink.

Such taxation not only affects hundreds of coconut processing enterprises that are exhausted after COVID-19, but also affects more than 200,000 coconut farmers in Ben Tre province and many other provinces. This causes budget losses for localities that grow coconuts, and even the central government has to support the budget to overcome natural disasters caused by the loss of coconut trees.

Explaining these issues, Deputy Prime Minister and Minister of Finance Ho Duc Phoc said that taxing sugary soft drinks is in line with international practice. According to Mr. Phoc, the imposition of tax on sugary soft drinks while not taxing solid sugars is due to the assessment by the World Health Organization and many other health organizations that liquid sugary soft drinks are absorbed into the liver quickly, causing diabetes. Solid sugars are absorbed and act more slowly, so control and prevention are better. Therefore, this is the reason for taxing sugary soft drinks.

“The delegates are concerned that coconut water, milk, dairy products, beneficial liquid products, pure fruit juice, cocoa… these are not subject to special consumption tax” – Mr. Phoc affirmed that when drafting a decree guiding the law, there will be specific regulations on the types of soft drinks that are not subject to special consumption tax.

Taxation on alcohol, beer and cigarettes should be implemented with appropriate roadmap.

Delegate Hoang Van Cuong (Hanoi) said that cigarettes, alcohol and beer are products that are harmful to health. Therefore, it is necessary to increase special consumption tax on these products, but it is necessary to consider how to increase it to change behavior.

Delegate Huynh Thi Phuc (Ba Ria - Vung Tau) suggested that it is necessary to assess the impact, consider the decision to apply and need a reasonable roadmap to adjust tax rates to be able to regulate consumption without negatively affecting the production and business activities of enterprises and the working lives of workers.

Source: https://tuoitre.vn/national-congress-delegates-also-hit-by-tax-payer-pho-thu-tuong-tran-an-20241127174600481.htm