On the morning of October 17, the Central Institute for Economic Management (CIEM) released its impact assessment report on the draft Law on Excise Tax. The report proposes to include sugary beverages containing more than 5g of sugar per 100ml, according to Vietnamese standards, as products subject to the excise tax.

The draft proposes a tax rate of 10%.

According to CIEM, applying a 10% excise tax on sugary beverages would shrink production scale and reduce the industry's output value.

Beverage companies have suggested postponing the excise tax, citing the significant shocks the industry has faced from the pandemic and unpredictable economic fluctuations.

Chu Thi Van Anh, Vice President and General Secretary of the Vietnam Beer-Alcohol-Beverage Association (VBA), stated that without thorough impact assessments, the VBA recommends not yet including sugary beverages in the excise tax category in this round of amendments.

Some companies pointed out that a more in-depth analysis is needed, as obesity isn’t solely caused by sugary beverages. Sugary drinks containing 5g/100ml of sugar cannot be the primary cause of obesity. Other products with high sugar content, such as milk tea, candies, and mooncakes, are widely available on the market. Should these also be taxed? And would such taxation be fair?

Nguyen Thi Cuc, President of the Vietnam Tax Consulting Association, argued that other sugary products are not taxed because their consumption isn’t as high as that of sugary beverages. She added that the increasing consumption of sugary drinks in Vietnam is affecting public health and the environment.

Tran Thi Nhi Ha, Deputy Head of the People's Petition Committee (under the National Assembly Standing Committee), acknowledged the feedback from the public and voters when discussing the excise tax proposal but admitted, "The question of whether to impose the tax or not is difficult to answer."

“The primary goal of taxation is to regulate consumer behavior and apply it to products that negatively affect health and the environment. There needs to be an assessment of whether sugary beverages harm consumers' health, which would serve as a basis for deciding whether to impose the tax on this product,” Ha concluded.

Tien Anh