On November 4, 2014, the National Assembly of Vietnam discussed the draft Law on amendments and supplements to a number of articles of the Law on Special Consumption Tax (SCT) and the Tax Laws Amendment and Supplementing Project. A majority of deputies agreed on the need to increase tobacco excise tax.
Necessary
Huynh Minh Thien, Deputy of Ho Chi Minh City, said Vietnam is among 15 countries with the biggest number of smokers in the world because its price is low and the buying is very easy although Vietnam has applied the Law on Prevention and Control of Tobacco Harms. Hence, to prevent the harmful effects of tobacco use, he proposed a strong rise in tobacco tax rate, to 75 percent from January 1, 2016 and 100 percent from January 1, 2018. Statistics in Thailand showed that when the duty was raised by 300 percent, addicts dropped 2 percent in 20 years. The Philippines saw the number of addicts dropping to 25 percent from 38 percent after it increased the tax rate by 1.5 times. Current tobacco tax in Vietnam is only 41 percent, much lower than 70 percent in Thailand, 46 percent in Malaysia, 59 percent in Indonesia and 80 percent in France. Deputy Doan Nguyen Thuy Trang of Ho Chi Minh City proposed lifting the tax rate to 65 percent in 2015, 80 percent in 2018 and 125 percent in 2020.
However, Deputy Nguyen Quoc Binh of Hanoi raised concerns over the fight against smuggling when the tax is augmented. In this regard, Deputy Doan Nguyen Thuy Trang did not agree on the opinion that the tax hike will lead to a rise in smuggling. She explained that cigarette smuggling has already increased sharply in the past five years, with smuggled volume rising 750 million packages to 1 billion packages. Hence, tax hike and smuggling control must be done at the same time.
Deputy Tran Du Lich of Ho Chi Minh City said that it does not matter to impose the tobacco excise tax of 75 percent or 200 percent because this moves is to protect human health, not to increase State budget revenue. Deputy Nguyen Tan Tuan of Khanh Hoa province supported intensifying control of smuggling across the country, and called for support policies for shrinking tobacco companies and control tobacco/cigarette distributors.
Regarding soft drink tax, Deputy Nguyen Thuy Trang and Deputy Huynh Thanh Lap supported imposing excise tax on soft drinks because they cause obesity and diabetes.
No tax write-off
Most deputies from Ho Chi Minh City did not support writing off overdue taxes for companies as suggested by the Government. Deputy Pham Khanh Phong Lan said debt relief will set a bad precedent and distort our objective. It is unfair and irrational to collect tax from law-abiding taxpayers but relieve it for those we cannot control. Deputy Huynh Ngoc Anh added that, for companies that we cannot get tax, reducing or writing off tax does not change the result. But, if we officially write off tax for them, law-abiding companies will feel unfair. Therefore, tax reduction to zero is unacceptable. Deputy Le Trong Sang suggested writing off tax debt to those with good tax-payment profiles.
Meanwhile, Deputy Vuong Dinh Hue of Binh Dinh province, Head of Central Economic Committee, said “I think we should not abolish tax but we should reduce the fine rate. If companies are in difficulty, they will be allowed to delay the tax but they must pay the fine on overdue tax.” He added that companies that incur most tax debt are real estate companies. Deputy Mai Thi Anh Tuyet of An Giang province explained that tax write-off will provide an excuse for companies to refuse to pay taxes in the hope of them being abolished in the future.
M.T
Vietnamese
