Proposal to impose 40% tax on sugary soft drinks

On November 15, the Ministry of Health held a seminar to provide information to the press about the current consumption situation, the harmful effects of sugary drinks on public health, and the role of special consumption tax in controlling consumption.

On November 15, the Ministry of Health held a seminar to provide information to the press about the current consumption situation, the harmful effects of sugary drinks on public health, and the role of special consumption tax in controlling consumption.

In recent years, the consumption of sugary soft drinks in Vietnam has increased rapidly.

According to Euromonitor 2023 data, total consumption of sugary soft drinks increased from 1.59 billion liters in 2009 to 6.67 billion liters in 2023, an increase of 420%. Per capita consumption also increased sharply, from 18 liters/person in 2009 to 66 liters/person in 2023 (an increase of 350%).

Ms. Dinh Thi Thu Thuy, Deputy Director of Legal Department (Ministry of Health).

The Department of Preventive Medicine also said that currently, Vietnamese people consume an average of about 46.5g of free sugar/person/day, nearly reaching the maximum limit of 50g/person/day as recommended by the World Health Organization (WHO). This consumption level is nearly twice as high as the healthy level, which is less than 25g/person/day.

Ms. Dinh Thi Thu Thuy, Deputy Director of the Department of Legal Affairs (Ministry of Health) shared that preventive medicine plays an important role in public health care. Investing in preventive medicine not only helps solve health problems but also brings socio-economic benefits and develops resources in the future.

According to Ms. Thuy, excessive consumption of sugary drinks is identified as one of the main causes of overweight, obesity, and metabolic disorders in both adults and children.

This condition leads to increased rates of type 2 diabetes, high blood pressure, heart disease, stroke, and death, along with bone, dental, kidney, urinary, and gastrointestinal disorders.

Ms. Thuy said that imposing special consumption tax on sugary drinks is one of the important interventions recommended by WHO to reduce consumption and limit the harmful effects of sugary drinks on public health.

The tax will increase the price of products, encouraging consumers to choose healthier drinks. This will help reduce the risk of obesity and non-communicable diseases related to diet, especially diabetes, which has been on the rise recently.

The Ministry of Health has worked closely with the Ministry of Finance to provide information on the current situation of consumption and harmful effects of sugary drinks. The Ministry of Finance has included sugary drinks in the taxable list in the draft Law on Special Consumption Tax (amended).

However, the imposition of a special excise tax on sugary drinks was first introduced in the draft Law, and therefore, still faces mixed opinions, mainly from the beverage industry.

The Ministry of Finance proposed a tax rate of 10% to encourage businesses to produce and import low-sugar soft drinks, while raising consumer awareness of the harmful effects of sugary drinks.

However, the Ministry of Health said it proposed a tax rate of 40% on sugary soft drinks, or 30% after gradually increasing to 40% according to the roadmap.

Additionally, the tax rate could be divided by sugar content to create different tax rates, similar to what other countries are applying.

At the seminar, MSc. Dr. Nguyen Tuan Lam, WHO representative in Vietnam, shared that diseases related to the regular use of sugary drinks such as tooth decay, type 2 diabetes, overweight, obesity, cardiovascular disease, kidney disease, non-alcoholic fatty liver disease, and gout are increasing rapidly.

Dr. Tuan Lam said that special consumption tax is an effective measure to reduce soft drink consumption and now is the right time to impose a tax on sugary drinks.

Dr. Tuan Lam suggested that Vietnam should adopt a roadmap for annual tax increases so that the tax on sugary drinks reaches 40% of the manufacturer's selling price by 2030, as recommended by the WHO. This would help protect the health of future generations.

At the same time, we should create a favorable environment to reduce the consumption of sugary drinks through measures such as front-of-pack labeling, advertising bans...".

The expert also emphasized WHO's recommendation to reduce free sugar consumption throughout life. Specifically, WHO recommends that in both adults and children, the amount of free sugar consumed should not exceed 10% of total daily energy intake, equivalent to 12 teaspoons of sugar.

Ideally, consumers should reduce their free sugar intake to less than 5% (equivalent to 6 teaspoons of sugar) of total energy intake, which will provide additional health benefits.

According to WHO recommendations, to reduce the consumption of sugary drinks, the retail price of sugary drinks needs to increase by 20% or more, equivalent to the special consumption tax rate on the factory price must be 40%.

This solution will contribute to improving public health, increasing budget revenue, helping to reduce health care costs for related diseases, and reducing long-term labor productivity losses.

Research conducted by the University of Public Health also estimated that a 40% tax rate would lead to reduced consumption and reduce the rate of overweight by 2%, the rate of obesity by 1.5%, prevent more than 81,462 cases of type 2 diabetes and save 24.55 million USD (more than 600 billion VND) in medical costs.

According to experts, tax is a low-cost but highly effective solution to reduce consumption of unhealthy products. This is also an effective preventive solution that has been recommended by WHO and the World Bank (WB) for countries to apply.

Taxation should be based on a harmonious balance of interests among state entities, people and businesses, but special priority should be given to the goal of protecting health and sustainable development of the country, not for profit at the expense of people's health.

Source: https://baodautu.vn/de-nghi-ap-thue-40-voi-nuoc-giai-khat-co-duong-d230138.html