In the appraisal dossier of the draft Law on Special Consumption Tax (amended) sent to the Ministry of Justice, the Ministry of Finance still proposed two options for increasing taxes on alcohol and beer. Specifically, alcohol with an alcohol content of 20 degrees or more will increase according to the roadmap from the current level of 65% to 90% or 100% by 2030. The maximum tax rate on alcohol under 20 degrees is 60% or 70% in the period 2026-2030.
Similarly, the tax rate on beer will increase from the current 35% to 90% or 100% annually during the period 2026 - 2030.
However, according to the World Bank (WB), increasing taxes according to the above roadmap is "significant but not enough to reduce the ability to pay for alcohol and beer over time".
The World Bank believes that Vietnam needs to increase taxes at a more ambitious level. They also recommend applying a percentage rate plus an absolute tax rate. Specifically, the World Bank proposes increasing the special consumption tax on alcohol to 155% or adding an absolute rate of VND16,500 (per liter of alcohol) plus the current tax rate of 65%. This will ensure that alcohol and beer do not become more popular, positively impacting health when the level of consumption of this type of beverage is adjusted.
The bank cited data showing that in 1990, the number of deaths and life expectancy lost due to alcohol use in Vietnam were 59% and 58% lower, respectively, than the average in lower-middle-income countries. However, these figures are now 140% and 104% higher, respectively. "The increasing death and disease rates are driven by the sales and consumption of alcohol and beer," the WB assessed.
According to the organization, in the period 2008-2022, the total consumption of alcohol and beer increased by 177%, of which beer accounted for 92%. Per capita consumption of alcohol and beer in Vietnam also increased by 142%. The WB also reiterated that in the period 2010-2018, the tax rate on beer increased from 45 to 65%, which was not strong enough to reduce people's consumption.
However, the Ministry of Finance believes that applying an absolute tax on this item is not suitable for Vietnam at the present time. Authorities also affirmed that the tax increase plan was based on the policy of protecting public health, the characteristics of the Vietnamese beer and wine industry, and the commitment to join the WTO.
Meanwhile, the Vietnam Beer - Alcohol - Beverage Association (VBA) and beer and alcohol businesses proposed to consider reducing tax rates and extending the adjustment roadmap.
However, according to the Ministry of Finance, the proposed plan of enterprises will not have a strong impact on reducing alcohol and beer consumption. The Ministry maintains the view of increasing the tax to a maximum of 100% by 2030. "This plan will reduce alcohol and beer consumption, as well as the related harms caused by the abuse of alcoholic beverages," the Ministry of Finance assessed.
With this roadmap, beer and wine prices will increase by 20% in 2026 and by about 2-3% each year thereafter. This level ensures that product prices increase in line with inflation and income. In addition, when consulted, ministries, sectors and localities all support the plan to increase taxes to a maximum of 100% for beer and wine with an alcohol content of 20 degrees or higher and 70% for wine below 20 degrees.
On the other hand, the budget will have an additional VND10,700 billion from special consumption tax on beer. This level is an increase of about 23% compared to the expected revenue in 2025 (before tax adjustment). From 2027-2030, tax revenue will increase by about VND3,500 billion per year. For alcohol, tax revenue will increase by nearly VND230 billion in 2026 and nearly VND80 billion per year thereafter.
In addition to beer and wine, the Ministry of Finance continues to propose imposing special consumption tax on soft drinks (soft drinks) with sugar content of more than 5 grams per 100ml. The expected tax rate is 10%.
The management agency also proposed to keep the tax rate on cigarettes at 75%, but add a gradually increasing absolute tax rate. Specifically, from 2026-2030, the absolute tax on cigarettes will increase by 5,000-10,000 VND per pack, cigars by 50,000-100,000 VND per cigarette... This regulation aims to reduce the smoking rate among men from 42.7% (in 2022) to 38.6% in 2030. The budget revenue for this item is expected to increase to 39,200 billion VND in 2030, 2.2 times higher than in 2022.
TH (according to VnExpress)Source: https://baohaiduong.vn/wb-khuyen-nghi-tang-thue-tieu-thu-dac-biet-voi-ruou-bia-len-155-388900.html
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