Revised Law on Special Consumption Tax to reduce consumption rate of products harmful to health

VCN – According to the assessment, the increase in the Law on Special Consumption Tax not only aims to regulate the consumption of products harmful to the health and the environment, improve the health of the population and enhance labor productivity and boost sustainable development, but also raise the State revenue.
Adding goods item subjected to special consumption tax Adding goods item subjected to special consumption tax
Proposal to increase Special Consumption Tax on tobacco products Proposal to increase Special Consumption Tax on tobacco products
Revised Law on Special Consumption Tax to reduce consumption rate of products harmful to health
Tax is a key solution to regulate consumer behavior for tobacco, alcohol and sugary drinks that are harmful to health. Illustrative photo: H.Anh

Keeping up with the trend of expanding the tax base

According to Mr. Truong Ba Tuan, Deputy Director of Department of the Tax policies, fees and charges Supervisory Authority (the Ministry of Finance), the current Law on Special Consumption Tax stipulates 10 commodity groups and six service groups subject to the Special Consumption Tax. The policies of other countries show that goods subject to the Special Consumption Tax of other countries are very diverse. For example, China imposes the Special Consumption Tax on 15 groups of goods, Thailand imposes the tax on 17 groups of goods and services...

Notably, four basic product groups are imposed the Special Consumption Tax in most countries, including tobacco products; alcoholic beverages (wines, beers) and sugary or carbonated soft drinks; petroleum products (gasoline, oil); automobiles. Mr. Truong Ba Tuan said that many countries around the world has reformed the Special Consumption Tax by expanding the tax base to limit the consumption of goods that are harmful to public health, children, the environment, or the State regulates consumption and supplements new goods and services to the Special Consumption Taxable (such as sugary soft drinks).

According to the representative of the drafting agency, the amendment of the Law on Special Consumption Tax aims to overcome the limitations and shortcomings of the current Law. For example, regulations on taxable subjects, non-taxable subjects, and descriptions of goods in the tax nomenclature are not specify and not consistent with the specialized laws, leading to the difficulties in implementation; the Special Consumption Tax rate for tobacco, alcohol, beer, and automobiles is still low, so it is not effective enough to limit consumption or regulate the income of high-income users in society; some objectives on the Special Consumption Tax policy stated in the Tax System Reform Strategy for the period 2011-2020, which are to study the application of mixed tax methods for goods harmful to health and the environment, have not been implemented; there are no regulations on refunding Special Consumption Tax for the amount of special consumption tax that has not been fully deducted for some goods that need to encourage the production and consumption of environmentally friendly products.

Regarding the revision of the non-taxable subjects in the draft Law, Ms. Le Thuy Linh, Deputy Head of the Special Consumption Tax Division, Department of the Tax policies, fees and charges Supervisory Authority, said that the draft law amends and supplements a number of subjects not subject to Special Consumption Tax, such as: adding the provision that “goods exported abroad and returned by foreign parties upon import” are not subject to Special Consumption Tax; supplementing the provisions on “passenger cars, four-wheeled passenger cars with engines that are not registered for circulation, do not participate in traffic and only operate in historical sites, hospitals, schools” and “other specialized cars under the Government regulations” to ensure feasibility in implementation…

Tax is a key solution to regulate consumer behavior

Regarding the special consumption tax rate on tobacco products, the representative of the Department of the Tax policies, fees and charges Supervisory Authority, said that the Government considers the option of increasing the tax rate by VND1,000/pack per year in the period of 2026 - 2029, and increasing by about VND 2,000/pack by 2030. The tax rate for shredded tobacco, pipe tobacco or other types, other products from tobacco plants used for smoking, inhaling, chewing, sniffing, or sucking will increase from VND50,000/100g or 100ml (from 2026), VND 60,000/100g or 100ml (from 2027), VND 70,000/100g or 100ml (from 2028), VND 80,000/100g or 100ml (from 2029), VND 100,000/100g or 100ml (from 2030). According to the drafting agency, if this roadmap is applied, the smoking rate among men is expected to decrease from 42.7% (2022) to 39.7% in 2026 and to 38.6% by 2030.

For alcohol and beer, the Government considers the option of increasing the tax rate from the current level of 65% to 80%, 85%, 90%, 95%, 100% per year in the period from 2026 to 2030. For soft drinks under Vietnamese Standards (TCVN) with a sugar content of over 5g/100ml, the tax rate will be 10% because this is a new item subject to Special Consumption Tax.

Regarding the Special Consumption Tax, experts said that the increase in the Special Consumption Tax not only regulates the consumption of products harmful to health and the environment to improve the health of the whole population, labor productivity and sustainable development, but also helps to significantly raise the State revenue... Economic expert Dao The Son said that in order to achieve the national goal of reducing smoking rates, it is necessary to increase taxes under the recommendations of the Ministry of Health and WHO by adding an absolute tax of VND 5,000/pack from 2026 and increasing it to VND 15,000/pack by 2030.

Dr. Nguyen Huy Quang, Head of Social Advisory, Criticism and Appraisal Board (Vietnam Medical Association) agreed with the need to amend the Law on Special Consumption Tax and emphasized that tax is a key solution to regulate consumer behavior for tobacco, alcohol and sugary drinks that are harmful to health. If the tax rate is increased to increase the price by 10%, it will reduce the consumption of tobacco and alcohol by about 5-8%, and the consumption of sugary drinks by 8%-13%.

According to the WHO Framework Convention on Tobacco Control, tobacco tax is the optimal solution that determines 50-60% of the effectiveness in preventing the harmful effects of tobacco. However, the imposition of Special Consumption Tax on tobacco, alcohol and sugary drinks needs to create a balance between economic benefits and people's health, but health is still the central issue in the policy of human resource development, social security and environmental protection. This is an issue of sustainable development to which the Party and the State have made strong commitments.

By Hoai Anh/Ngoc Loan

Related News

Tax sector focuses on simplifying tax administrative procedures

Tax sector focuses on simplifying tax administrative procedures

VCN - The tax sector is focusing on researching and proposing amendments to legal documents to simplify processes and procedures; promoting the modernization of information technology applications to support the settlement of tax refund dossiers more conveniently and quickly.
Customs warns people trick of impersonating customs officer to sell liquidated products

Customs warns people trick of impersonating customs officer to sell liquidated products

VCN – According to regulations, liquidated goods will be auctioned publicly by the Customs, and will not be allowed to sell in the market. People need to be vigilant to avoid being defrauded and lost money.
Nghe An Customs encourages enterprises to improve law compliance level

Nghe An Customs encourages enterprises to improve law compliance level

VCN – After 2-year implementation of the pilot program to support and encourage businesses to voluntarily comply with customs laws (referred to as the Compliance Program), enterprises have developed plans to improve the compliance level. Nghe An Customs Department has assigned officers to receive information, and held meetings to resolve problems of enterprises, the department reported.
Maintain smooth operations of Customs, Tax and Treasury to support businesses and people affected by storm No. 3

Maintain smooth operations of Customs, Tax and Treasury to support businesses and people affected by storm No. 3

VCN – The Ministry of Finance has requested to maintain smooth operations of Customs, Tax, Treasury agencies and national reserve units to support production and business activities and people after the storm, Deputy Minister of Finance Vo Thanh Hung said.

Latest News

Checking and reviewing the classification of exported copper

Checking and reviewing the classification of exported copper

VCN - In order to ensure that the classification is consistent with the declared code, the General Department of Vietnam Customs requests the customs departments of provinces and cities to strengthen the inspection and review of the classification of exported copper goods.
Amendment of Special Preferential Import and Export Tariff Schedule to Implement CPTPP Agreement for the 2022-2027 Period

Amendment of Special Preferential Import and Export Tariff Schedule to Implement CPTPP Agreement for the 2022-2027 Period

VCN - The Ministry of Finance is drafting a decree amending and supplementing a number of articles of Decree No. 115/2022/ND-CP dated December 30, 2022 of the Government promulgating Vietnam's preferential export tariff schedule and special preferential import tariff schedule to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) for the 2022-2027 period. The Decree is expected to take effect from the date of signing.
Must strictly manage duty-free goods

Must strictly manage duty-free goods

VCN - The General Department of Customs has just responded to the Binh Phuoc Customs Department to guide Binh Duong Water and Environment Corporation to implement regulations on the management of tax-free imported goods.
Amend the law to protect the rights of accountants

Amend the law to protect the rights of accountants

VCN - Promoting decentralization, delegation of authority, improving state management capacity in the field of accounting, enhancing the responsibility of leaders, etc will ensure the legitimate rights of accountants, prevent corruption and waste.

More News

Simplification is not enough, enterprises need stronger administrative reform

Simplification is not enough, enterprises need stronger administrative reform

VCN - Commenting on the Draft Report on improving business regulations to support productivity growth in Vietnam, the Vietnam Chamber of Commerce and Industry (VCCI) said that regulations on administrative procedures need stronger reform.
Propose a 15-30% reduction in land rents in 2024 for people affected by typhoon Yagi

Propose a 15-30% reduction in land rents in 2024 for people affected by typhoon Yagi

VCN - To support people and businesses with more resources to cope with difficulties and challenges in production and business due to the impact of typhoon No. 3 (Yagi), the Ministry of Finance proposed a 15-30% reduction in land rents in 2024.
Amending 3 important policies in the Law on State Budget

Amending 3 important policies in the Law on State Budget

VCN - The Ministry of Finance proposed regulations allowing local budgets to invest in the construction of central infrastructure works in the locality and support other localities to invest in the construction of regional and inter-regional infrastructure projects, contributing to mobilizing resources from the budgets of financially capable localities for inter-regional projects to be completed soon, helping localities in the region promote socio-economic development.
MoF proposes to abolish Article 35 on “on-the-spot import and export” in Decree No.08/2015/ND-CP

MoF proposes to abolish Article 35 on “on-the-spot import and export” in Decree No.08/2015/ND-CP

VCN - The Ministry of Finance (the General Department of Vietnam Customs) has received comments on the draft Decree amending and supplementing a number of articles of Decree No. 08/2015/ND-CP providing specific provisions and guidance on enforcement of the customs law on customs procedures, examination, supervision and control procedures. In addition to revision related to on-the-spot import and export activities, the draft also proposes to supplement new regulations to meet requirements of implementing digital customs, ensuring compliance with practical situations and promoting customs modernization.
Chile officially issues electronic C/O form VC from November 1, 2024

Chile officially issues electronic C/O form VC from November 1, 2024

VCN - The General Department of Customs has just sent a notice to the local customs departments related to electronic Certificate of Origin (C/O) in the Vietnam - Chile Free Trade Agreement (FTA)
Adding tax exemption conditions in the draft revised Law on Corporate Income Tax

Adding tax exemption conditions in the draft revised Law on Corporate Income Tax

VCN - Practice has raised the need to amend and supplement the Law on Corporate Income Tax (CIT) to suit the development of the domestic and foreign economy and society. According to the assessment, the completion of the draft Law on Corporate Income Tax will move towards a more favorable business environment, encourage investment and sustainable development as well as meet the goals set for CIT reform.
Increasing penalties to reduce violations in independent auditing

Increasing penalties to reduce violations in independent auditing

VCN - After 12 years of implementation, the Law on Independent Auditing has provided an important legal framework for the enforcement of policies and the transparent disclosure of financial reports by businesses. However, one limitation is that the penalties are not strong enough to ensure deterrence.
Amending the Law to create the best conditions for state-owned enterprises

Amending the Law to create the best conditions for state-owned enterprises

VCN - So far, more than a dozen seminars and discussions have been held to solicit opinions on the draft Law on Management and Investment of State Capital in Enterprises. This is a complex bill, with a large impact and many issues to be discussed, it has attracted great attention from management agencies for the sustainable development of the state-owned enterprise (SOE) sector.
Tax increase for alcohol, beer, tobacco should go with combat against smuggling and tax evasion

Tax increase for alcohol, beer, tobacco should go with combat against smuggling and tax evasion

VCN - The Government suggests that it is necessary to develop regulations on special consumption tax that adhere to the principle of promoting production and business, economic development and meet the requirements of protecting the environment and people's health.
Read More

Your care

Latest Most read
Checking and reviewing the classification of exported copper

Checking and reviewing the classification of exported copper

General Department of Vietnam Customs requests the customs departments of provinces and cities to strengthen the inspection and review of the classification of exported copper.
Amendment of Special Preferential Import and Export Tariff Schedule to Implement CPTPP Agreement for the 2022-2027 Period

Amendment of Special Preferential Import and Export Tariff Schedule to Implement CPTPP Agreement for the 2022-2027 Period

The Ministry of Finance is drafting a decree amending a number of articles of Decree No. 115/2022/ND-CP dated December 30, 2022 of the Government promulgating Vietnam's preferential export tariff schedule and special preferential import tariff schedule to
Must strictly manage duty-free goods

Must strictly manage duty-free goods

The GDVC has just responded to the Binh Phuoc Customs Department to guide Binh Duong Water and Environment Corporation to implement regulations on the management of tax-free imported goods.
Amend the law to protect the rights of accountants

Amend the law to protect the rights of accountants

VCN - Promoting decentralization, delegation of authority, improving state management capacity in the field of accounting, enhancing the responsibility of leaders, etc will ensure the legitimate rights of accountants, prevent corruption and waste.
Simplification is not enough, enterprises need stronger administrative reform

Simplification is not enough, enterprises need stronger administrative reform

Vietnam Chamber of Commerce and Industry (VCCI) said that regulations on administrative procedures need stronger reform.
Mobile Version