Proposal to subject alcohol and beer to 100% special consumption tax

(Dan Tri) - The Ministry of Finance has proposed to increase special consumption tax on alcohol and beer according to a roadmap, up to 100% by 2030. Cigarettes, tobacco, cigars, and pipe tobacco are also in the group that may be subject to tax increases.

The Ministry of Finance recently submitted a draft amendment to the Law on Special Consumption Tax to the Government. The Ministry proposed taxing all alcoholic beverages, fermented foods from fruits, cereals, and beverages mixed with edible alcohol.

Two options were proposed, but the Ministry leaned towards the option of imposing an 80% tax on alcohol with an alcohol content of 20 degrees or more in 2026, gradually increasing to 100% in 2030; alcohol with an alcohol content of less than 20 degrees is subject to a 50% tax, then increasing to a maximum of 70%; beer of all kinds is also gradually increased, from 80% to 100%.

Options for increasing special consumption tax on alcohol according to the roadmap proposed by the Ministry of Finance. This unit is leaning towards option 2 (Screenshot).

The ministry estimated the direct cost of alcohol and beer consumption in Vietnam in 2017 at 4 billion USD, nearly 7% of the state budget revenue (not including indirect costs).

"Although the special consumption tax rate on beer and wine has increased according to the roadmap from 2016-2018, the purchasing power of Vietnamese people for wine and beer is still increasing due to rapidly increasing income while the price of wine and beer increases very slowly," the Ministry stated.

The current excise tax rate for beer is 65%; wine is 35-65%, depending on whether the alcohol content is below or above 20 degrees. The Ministry of Finance's proposed adjustment this time aims to increase the selling price by 10%, following the recommendation of the World Health Organization (WHO).

"Compared to 2025, the selling price of alcohol and beer will increase by 20% in 2026. In the following years, the prices of these items will increase by 2-3%, depending on inflation and economic growth," said the Ministry of Finance.

According to the development plan of Vietnam's beer, wine and beverage industry, by 2025, the country will produce about 4.6 billion liters of beer, 350 million liters of wine, and 9.1 billion liters of soft drinks. Export turnover will reach 600 million USD.

The Ministry of Finance believes that alcohol and beer consumption, if abused, will cause many harmful effects to consumers' health, affecting security, order and traffic safety. Alcoholic beverages (wine and beer) are addictive and can easily lead to abuse.

The Ministry of Finance stated: "Applying high tax rates is necessary to raise awareness and action on the harmful effects of excessive alcohol consumption. Applying high tax rates helps reduce consumption and limit abuse of this product."

In the draft, the Ministry also proposed to increase the tax rate on tobacco, including cigarettes, tobacco shreds, cigars, pipe tobacco or other forms. Initially, the tax rate on tobacco will be kept at 75%, but depending on the item, an absolute tax rate will be added to gradually increase. Specifically, from 2026 to 2030, the absolute tax rate on cigarettes will gradually increase from 5,000-10,000 VND/pack, cigars 50,000-100,000 VND/cigarette; tobacco shreds and tobacco products will increase by 50,000-100,000 VND per 100gr/ml.

According to the Ministry of Finance, the above regulation will help reduce the smoking rate among men from 42.7% (in 2022) to 38.6% in 2030. The budget revenue from tobacco will increase 2.2 times compared to 2022, to VND39,200 billion in 2030.

As planned, the Law on Special Consumption Tax (amended) will be submitted to the National Assembly for approval at the session in May 2025.

Thu Thao

Source : https://dantri.com.vn/kinh-doanh/de-xuat-ruou-bia-chiu-thue-tieu-thu-dac-biet-100-20240614101215429.htm