Increasing special consumption tax needs a reasonable roadmap to support businesses

DNVN - On the afternoon of April 22, at the workshop "Promoting economic growth: Perspective from enterprises subject to special consumption tax" organized by Nhan Dan newspaper, experts emphasized that the roadmap for applying special consumption tax (SCT) needs to be built reasonably to help enterprises overcome difficulties, contributing to achieving the GDP growth target of 8% or more in 2025.

Tạp chí Doanh Nghiệp•22/04/2025

Businesses face heavy economic pressure

Editor-in-Chief of Nhan Dan Newspaper Le Quoc Minh commented that in the second quarter of 2025, Vietnam's economy will continue to be affected by global economic and political fluctuations, along with unpredictable factors such as natural disasters and epidemics.

“This is the time to focus on solutions to increase domestic production and have policies to promote domestic consumption to become an important driving force for economic growth,” Mr. Minh emphasized.

Mr. Le Quoc Minh - Member of the Party Central Committee, Editor-in-Chief of Nhan Dan Newspaper.

According to Mr. Minh, the 8% GDP growth target is a big challenge, requiring close coordination between the Government, businesses and people. The draft Law on Special Consumption Tax, expected to be considered by the National Assembly at its May 2025 session, aims to orient production, regulate consumption, and limit products that are harmful to health and the environment. However, proposals to increase tax rates and expand the list of taxable items could have a strong impact on the production, business, distribution and service chains.

The draft Law on Special Consumption proposes to increase the tax rate on beer (currently 65%) according to two options. Option 1 increases by 5%/year from 2026 to reach 90% by 2030. Option 2 increases sharply by 15% in 2026, then increases by 5%/year to reach 100% by 2030. Experts assess that both options have an increase rate that is too rapid, making it difficult for beer and alcohol businesses to respond in time.

Mr. Nguyen Van Viet - Chairman of the Vietnam Beer - Alcohol - Beverage Association (VBA), shared that the Special Consumption Tax will have a strong impact on many production and business sectors that are already facing many difficulties. Many businesses have reduced production output by 20 - 30%, forcing them to cut labor and income. Many businesses with a budget of thousands of billions of VND/year have even closed down.

VBA Chairman Nguyen Van Viet.

The beverage industry currently contributes about VND60,000 billion per year to the budget and creates jobs for millions of workers. The sudden increase in special consumption tax from 2026 could have a chain reaction affecting about 20 related industries, from raw material supply to distribution services. VBA recommends postponing the tax increase and applying a slower increase roadmap so that businesses have time to recover and continue to contribute to economic growth.

Many businesses in the beer and alcohol industry are facing a declining domestic market, fierce international competition, and rising production costs. Opinions at the workshop suggested that a slightly longer, more gradual tax increase would both support economic growth goals and encourage responsible alcohol consumption, building more civilized consumption habits.

Stimulating domestic demand, ensuring long-term benefits

Tax expert Nguyen Van Phung proposed that, in order to stimulate domestic consumption and nurture budget revenue, Vietnam needs to soon reduce value-added tax (VAT) from 10% to 8%, applied to all goods and services, including items subject to special consumption tax, and last until at least the end of 2026. This solution ensures fairness, is consistent with the VAT deduction mechanism, and avoids the phenomenon of "tax transfer" or tax increase for products subject to a 10% tax rate.

Regarding the draft Law on Special Consumption, Mr. Phung said that option 1 (increase 5%/year from 2026) should be prioritized over option 2 (increase 15% from 2026) to reduce pressure on businesses.

The workshop received many comments from businesses, emphasizing the need for regular dialogue between management agencies and the private sector.

VBA Chairman Nguyen Van Viet proposed to postpone the increase in special consumption tax until 2028, with an increase of 5% per year for 5 years, to help businesses stabilize production and adapt. Businesses emphasized that tax policies need to be carefully developed, taking into account the economic situation and industry characteristics to ensure sustainable budget revenue while achieving the goal of responsible consumption.

“We hope that the tax policies issued must ensure the harmony of interests between enterprises, the State and the people. Our wish is to make the best contribution to socio-economic development, especially with the scenario of 8% economic growth and double-digit growth in the coming years,” Mr. Viet wishes.

The workshop received many comments from businesses, emphasizing the need for regular dialogue between management agencies and the private sector. Business representatives proposed that the Government organize more forums to listen to opinions and improve tax policies in line with the current economic context, thereby creating conditions for businesses to recover and develop sustainably.

Phuong Thao

Source: https://doanhnghiepvn.vn/kinh-te/tang-thue-tieu-thu-dac-biet-can-lo-trinh-hop-ly-de-ho-tro-doanh-nghiep/20250422113605541

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