Mr. Bui Ngoc Tuan, Deputy General Director of Deloitte Vietnam, said that imposing special consumption tax on wine and beer without basing on alcohol concentration, as stipulated in the Draft Law on Special Consumption Tax (amended) submitted to the National Assembly at the upcoming 8th Session, is unreasonable and does not protect consumers' health.
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| Mr. Bui Ngoc Tuan, Deputy General Director of Deloitte Vietnam |
Supporting the amendment of the special consumption tax towards increasing the tax rate at a reasonable level, why do you think that the Draft Law on Special Consumption Tax (SCT) is not fair?
Regarding the tax on alcohol and beer, according to the Draft, it is no different from the current tax rate, except for the increase in tax rates. Specifically, alcohol with an alcohol content of 20 degrees or more will be taxed at 70% in 2026 and increased to 90% in 2030 (option 1), or from 80% and up to 100% (option 2). For alcohol under 20 degrees, the corresponding tax rate will be 40% and up to 60% or from 50% to 70%. As for beer, regardless of canned beer, bottled beer, draft beer, fresh beer and regardless of alcohol concentration, all will be taxed at 70% in 2026 and increased to 90% in 2030 (option 1) or from 80% to 100% (option 2).
I have not discussed whether the tax rate is high or low, whether it is reasonable or not, whether the increase roadmap is suitable for the production and business activities of the enterprise or not, but only considering the tax rate based on the percentage calculated on the import price (registering customs declaration) or the selling price of the manufacturer (time of transferring ownership or right to use goods to the buyer), without basing on the alcohol concentration, which is unreasonable and does not protect consumers.
With this tax method, a unit of beer is also subject to special consumption tax equal to a unit of alcohol with 20 degrees or more and much lower than the tax on alcohol below 20 degrees.
Specifically, what is unreasonable, sir?
Alcohol content is calculated by the number of milliliters of pure ethanol in 100 ml of solution. The higher the alcohol content, the greater the harm to the health of consumers and society. Normally, bottled and canned beer has an alcohol content of 4.2 - 5.1 degrees; draft beer has an alcohol content of only about 3.5 degrees, while regular wine is 40 degrees or more, but is subject to the same tax rate, which is unfair.
Another unreasonable point is that Vietnamese culture only drinks alcohol when “sitting at a table”, while drinking beer is mainly for thirst quenching. Thanks to improved income, now, in the refrigerators of most families there are some bottled and canned beer to serve thirst quenching needs, but being taxed like alcohol is unfair.
Previously, canned and bottled beer were taxed at different rates than draft and fresh beer, but now all types of beer are taxed at the same rate. What is your opinion on this issue?
Before 2010, the special consumption tax on beer was differentiated by type of beer: bottled beer and canned beer were subject to higher tax rates than draft beer and fresh beer. However, since January 1, 2010, all types of beer are subject to the same tax rate, which, in my opinion, is not suitable for the actual situation in Vietnam.
Draft beer is widely used, meeting the needs of the majority of people with average income or lower, but is taxed at the same level as canned and bottled beer, meaning that special consumption tax has not yet achieved the goal of ensuring fairness and contributing to income regulation in society.
According to the Draft Law on Special Consumption Tax (amended), all types of beer are subject to the same tax rate as alcohol over 20 degrees. Do you find it unreasonable when there is zero-degree beer on the market?
To prevent the use of alcohol and beer while participating in traffic, the Government issued Decree No. 100/2019/ND-CP regulating administrative penalties for violations in the field of road and rail traffic. In order to meet consumer demand, alcoholic beverage manufacturing enterprises have produced zero-degree beer. Zero-degree beer is actually just a soft drink, but it is still "known" as beer, so it is unreasonable to be subject to special consumption tax.
Furthermore, tourism is identified as a key service industry of our country, with the goal of welcoming 17-18 million international visitors each year, including Muslim tourists (who do not consume alcoholic beverages). Accordingly, it is necessary to encourage businesses to produce zero-degree beer to serve the needs of domestic consumers, tourists, and export to Muslim countries... and there should be no tax on zero-degree beer.
So, in your opinion, how should special consumption tax on alcoholic beverages be levied to achieve multiple goals?
Using alcohol and beer during holidays, Tet, weddings, death anniversaries, birthdays... is a cultural feature of Vietnamese people. To meet this need, while protecting the safety and health of users as well as social order and security, businesses will produce beers with very low alcohol content, only 1 - 2 degrees. Therefore, to ensure fairness and achieve many purposes, taxes should be levied based on alcohol concentration as many countries are doing. For example, each alcohol concentration is taxed at a rate of 5%; the higher the alcohol content of beer and wine, the heavier the tax.
With this tax method, draft beer for the vast majority of workers is only subject to a tax of about 15 - 18%, alcohol under 20 degrees is subject to a tax rate of about 100% and alcohol over 40 degrees, mainly imported strong alcohol brands, is subject to a tax rate of over 200%.
Any tax is aimed at ensuring revenue for the state budget. In reality, beer consumption is many times greater than wine consumption. If tax is based on alcohol concentration, will the state budget revenue be reduced?
As far as I know, the annual special consumption tax contributes about 10% of the total state budget revenue, of which beer and wine account for a fairly high proportion. If we are concerned about the state budget revenue decreasing, we can divide it up, for beer, each alcohol content is subject to a special consumption tax rate of 10%, and for wine, it is 5%. This way, we can ensure revenue for the budget, ensure fairness, and encourage businesses to produce low-alcohol beer to meet social consumption.
Source: https://baodautu.vn/muc-thue-doi-voi-ruou-bia-nen-tinh-theo-nong-do-con-d225172.html
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