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Economic News

Last updated: Wednesday, November 22, 2017

 

Special Consumption Tax on Soft Drinks Proposed

Posted: Friday, August 25, 2017

This content is proposed by the Ministry of Finance when drafting the Law on Special Consumption Tax. The category of soft drinks proposed to be subject to special consumption tax includes carbonated soft drink, non-carbonated soft drink, energy drink, tea and packaged instant coffee except for natural fruit juices and milk. The Ministry of Finance explains that the move aims to regulate the consumption of sugared drinks.

According to the Ministry of Finance, not only Vietnam but also other countries in the region levy special consumption tax on this item in order to orient and restrict the consumption of sugared beverages. Thailand, Laos and Cambodia are imposing 5 - 20 per cent of special consumption tax on soft drinks, depending on type. Three other ASEAN countries are also considering levying special consumption tax on soft drinks, including Myanmar (planning to collect 5 per cent), the Philippines (taking 10 pesos per litre) and Indonesia (collecting 3,000 rupiahs per litre). In Europe, the tax rate is higher. For example, soft drinks are taxed an absolute rate of 0.72 EUR per litre in France, 0.75 EUR per litre in Finland and 0.04 EUR per bottle or can in Hungary.

As for methods of application, the Ministry of Finance suggested two options to the Government, 10 per cent or 20 per cent, applicable from 2019. The ministry supports the 10 per cent rate.

Nguyen Thanh








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