HCMC – The Ministry of Health has proposed a tiered tax system for sugary drinks, replacing the current draft law that imposes a single tax rate on drinks with five grams of sugar per 100 ml or more.
This was discussed on August 1 during a session evaluating amendments to the Special Consumption Tax Law.
The Ministry of Justice organized the session to review the proposed changes to the law. According to its website, feedback indicated that the current law, which has been in effect for 16 years and amended multiple times, has significant limitations. These include a narrower scope of taxable items compared to international standards and unclear descriptions of taxable and non-taxable items. Revising the law is deemed necessary.
The Ministry of Health also recommended excluding new tobacco products from the revised tax law, pointing to the 2012 Tobacco Harm Prevention Law, which does not define these products. It advocated maintaining the current 75% tax rate on traditional tobacco products.
The ministry urged aligning the taxation of sugary drinks with World Health Organization definitions and Vietnamese standards. It suggested higher taxes for beverages with more sugar to reduce their production and consumption.
The Vietnam Tobacco Association warned that a sudden tax increase on cigarettes, as proposed in the draft law, could negatively impact the industry. The draft suggests raising the tax to VND2,000-5,000 per pack by 2026 and VND10,000 per pack by 2030. The association proposed a more gradual increase: VND1,000 per pack from 2026 to 2028 and VND3,000 per pack by 2030.
The Ministry of Planning and Investment noted that the law’s revision would affect many industries and businesses. It emphasized the need for impact assessments and a suitable implementation timeline to avoid disrupting production, business activities, and employment.
The Ministry of Planning and Investment also suggested that the Ministry of Finance define and set standards for new taxable industries, such as golf, massage and karaoke.
