A proposal to impose special consumption taxes on online games in Vietnam has been shot down by businesses and industry experts.

Vietnam is considering levying a special consumption tax on online video games, which has caused concern in the sector.

The gaming industry makes great contributions to the digital and knowledge-based economy, so it is necessary to view it as a business field. Enterprises need to join forces to change the prejudices about the industry.

Vietnamese game publishers are striving to rise up the ranks of the global gaming industry by holding on to top talent and encouraging modern thinking from legislators and potential consumers.

Vietnam’s games have had achievements in the world market but a push is needed to develop further.

In Southeast Asia, Vietnam takes a large share of the pie with 54.6 million gamers, raking in $507 million in 2022.

To develop human resources for the game industry, experts have suggested offering a major in games at the higher education level.

Online games, together with sugary drinks, barley drinks, non-alcoholic beverages and electronic cigarettes, have been grouped by the Ministry of Finance (MOF) as items subject to a special consumption tax (luxury tax).

If Vietnam imposes a luxury tax on electronic games, this will deal a strong blow to the game industry, said VCCI’s (Vietnam Confederation of Commerce and Industry) head of Legal Department Dau Anh Tuan.

There are about 200 Vietnamese-owned game studios, but most of them are headquartered in Singapore and pay tax there.

If a luxury tax is imposed on games, the games industry will no longer make a profit, and domestic firms will either fade away or be forced to seek business opportunities overseas.

Formerly witnessing a prosperous period, Vietnam’s game industry has been shrinking in recent years. The management cannot keep up pace with development, while domestic games are having to compete with pirated ones.

With app stores’ decisions to reduce discounts and support from payment service providers such as credit cards and e-wallets (MoMo), pirated games of international distributors, especially Chinese games, can easily enter Vietnam.

Gaming in Vietnam continues to be exceedingly popular, but developers are still in a weak position due to outdated regulations.

The aim is to help Vietnam’s game industry rid itself of prejudice about its harm to people, and serve as a ‘touching point’ for game firms to reach out to the global market.