Ministry of Finance proposes to increase special consumption tax according to roadmap
According to the report of the Ministry of Finance:
Option 1: Maintain the current tax calculation method and increase special consumption tax according to a roadmap consistent with the recommendations of the World Health Organization (WHO).
Option 2: Adjust the tax increase by applying a mixed tax calculation method (applying both relative tax according to the percentage rate and adding an absolute tax rate for alcohol and beer).
Of the above two options, the Ministry of Finance proposes to choose option 1 to ensure competition in the context of differences in quality and price of alcoholic beverages and also to ensure budget revenue.
Recently, in a document sent to the Prime Minister and relevant ministries and branches, the Vietnam Association of Financial Investors (VAFI) also agreed with option 1, which means maintaining the current tax calculation method and increasing special consumption tax according to a roadmap consistent with WHO recommendations.
Applying a single tax rate would be unfair.
Sharing about this issue, National Assembly delegate Pham Van Hoa - Member of the National Assembly's Law Committee agreed with the plan to maintain the current tax calculation method and increase special consumption tax according to a roadmap in line with WHO's recommendations.
According to Mr. Hoa, in the difficult context of the economy in general and businesses in particular, it is necessary to limit adjustments to policies that have a strong impact on the production and business activities of enterprises. Therefore, he believes that at this time, the State needs to maintain the current tax calculation method and increase it according to the roadmap.
"Maintaining the current tax calculation method and increasing special consumption tax according to the roadmap is suitable for businesses and the current economic context," said the delegate.
Meanwhile, analyzing option 2, National Assembly delegate Pham Van Hoa said that adding an absolute tax rate on alcohol and beer is unfair to all businesses in the industry.
According to a member of the National Assembly's Law Committee, each enterprise has different production and business capacity, different markets, and different product prices, so it is impossible to apply the same tax rate, which will lead to inequality and unfairness.
"Imposing an absolute tax on alcohol and beer is not appropriate because each company has different capacity, market and product prices. For example, if Heineken beer is priced at VND460,000 per crate, they must pay the tax rate at that price, but if Saigon or Hanoi beer is priced at VND300,000 per crate, how can they pay the tax rate at VND460,000?", Mr. Hoa analyzed.
Therefore, National Assembly delegate Pham Van Hoa proposed a reasonable way to calculate special consumption tax to ensure competitiveness and fairness for businesses, especially beer production companies in the low-end and popular segments that will be heavily affected.
Vietnamese businesses may face difficulties
According to Mr. Nguyen Hoang Hai - Vice President of VAFI, many businesses in the industry agree on the roadmap to increase special consumption tax when socio-economic conditions allow in each stage but must ensure the principle of fairness for all businesses.
In option 2, Mr. Hai said that with the method of calculating special consumption tax using the mixed method, businesses do not question the tax calculation based on percentage because it ensures fairness for all businesses.
However, they cannot accept the absolute tax rate being calculated the same on a unit of consumed product regardless of whether the beer has a high or low value, causing small and medium enterprises to quickly go bankrupt because they have to pay an absolute tax rate that is too high compared to the selling price.
According to Mr. Hai, because the absolute tax rate is applied equally to a unit of consumed product, even though product prices vary between brands, high-end and near-high-end beer production companies, and leading enterprises dominating the market can benefit from this mechanism.
Meanwhile, small and medium-sized beer producers, most of whom are Vietnamese enterprises with less competitive advantages, will face great difficulties if the special consumption tax calculation policy changes to a mixed method.
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