On March 18, the Vietnam Federation of Industry and Commerce (VCCI) held a workshop on "Consulting to complete the draft Law on Special Consumption Tax", before submitting it to the National Assembly for approval at the upcoming 9th session.

Fearing high taxes, users turn to consuming smuggled products

Speaking at the workshop, Dr. Can Van Luc, chief economist of BIDV Bank, noted that businesses will still face many difficulties due to the trade and technology war; high input and logistics costs, uneven and unsustainable order recovery...

Therefore, the faster and higher the tax increase, the greater the total reduction in benefits for the industry and the economy, leading to a decrease in aggregate consumer demand and investment.

“The sharp and rapid increase in special consumption tax (SCT) on alcoholic beverages may affect the long-term budget contribution efficiency; creating a "difficult on top of difficult" situation for businesses and workers in the industry and related industries, such as packaging, transportation, tourism, catering, etc.,” Mr. Luc acknowledged.

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Dr. Can Van Luc.

From there, Dr. Can Van Luc suggested that the optimal solution should be considered, which is to delay implementation from January 1, 2028 and extend the tax increase application period so that businesses have time to prepare.

Dr. Vo Tri Thanh, Director of the Institute for Brand and Competition Strategy Research, “dissected” the objectives of the special consumption tax, especially in regulating consumer behavior and health.

According to Mr. Thanh, consumption of beer, wine, etc. cannot be reduced because consumers tend to switch to illegal and smuggled products. Meanwhile, Decree 100 or Decree 168 has reduced consumption of these products.

“I agree with the proposal of businesses and associations on tax deferral. It is necessary to carefully study the effectiveness, efficiency and fairness of the tax, as well as the impact on the budget, consumption, and labor..." - Mr. Thanh suggested.

Ms. Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consulting Association (VTCA), said that choosing option 2 according to the draft law is a rapid increase and continues to cause difficulties for manufacturing, trading and food service enterprises.

VTCA recommends that there should be a reasonable increase roadmap to ensure the maintenance of production and business activities, jobs for workers, and market stability.

Postpone tax increase deadline to give businesses more flexibility

At the workshop, representatives of many businesses proposed to "give businesses more time".

Chairman of the Vietnam Beer - Alcohol - Beverage Association (VBA) Nguyen Van Viet shared that in the last months of 2024 and early 2025, especially during Tet, the beverage industry recorded a decline due to a sharp decrease in demand and people tightening their spending.

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VBA Association President Nguyen Van Viet

Mr. Viet analyzed that if the tax is increased quickly, it will cause obstacles and lose the motivation to boost consumption to achieve the growth target. Therefore, the VBA leader proposed to postpone the tax increase on alcohol and beer to 2028, the increase roadmap should follow option 1 to support business development.

Senior Director of Foreign Affairs, representative of Heineken Vietnam Brewery Company Limited, Ms. Tran Ngoc Anh, recommended that appropriate policies be in place to avoid the "double" trap: export difficulties and the domestic market not achieving the expected growth rate.

Ms. Anh reflected that Nielsen recorded that the output of unofficial beer in 2024 increased by 71%, accounting for 5.8% of the market share nationwide, with 8% in the Mekong Delta alone. This not only causes budget loss but also poses potential health safety risks to users.

"The drafting committee needs to consider a reasonable tax increase roadmap to minimize negative impacts on the goals of the Government, businesses and consumers, thereby maintaining economic growth momentum. We recommend the first tax increase in 2027 and the tax rate should follow option 1," said Ms. Tran Ngoc Anh.

Representative of Saigon Beer - Alcohol - Beverage Corporation (SABECO) Nguyen Hoang Giang proposed to postpone the imposition of special consumption tax to 2028 instead of 2026, in order to ease the burden, avoid adding difficulties to difficulties for businesses, and at the same time support economic growth and nurture revenue sources.

Ms. Huynh Thi Thanh Truc, representative of the Wine - Spirits Subcommittee of EUROCHAM, expressed her hope that the Government would consider a suitable and harmonious tax roadmap to achieve the goals of tax collection, business development and public health protection.

The Law on Special Consumption Tax (amended) provides two options for imposing special consumption tax on beer and wine.

Option 1, increase from 2026 with an increase from 65% to 70% and continue to increase by 5% each year until 2030 reaching 90%.

Option 2, increase from 2026 with an increase of 65% to 80% and continue to increase by 5% each year until 2030 reaching 100%.

Proposal to remove special consumption tax on gasoline and air conditioners Gasoline and air conditioners are both essential goods. At the meeting of the National Assembly Standing Committee, opinions proposed to remove the regulation on applying special consumption tax on these two goods.