HCMC – Vietnamese lawmakers remain divided over proposed revisions to the Special Consumption Tax (SCT) Law, with the proposed exclusion of air conditioners from the tax stirring strong debate.
Deputy Ha Sy Dong from Quang Tri Province proposed scrapping the tax on air conditioners, saying this product is now essential to daily life in Vietnam. He highlighted that Vietnam may be the only country taxing air conditioners, with the SCT first introduced in 1998 at 20% and reduced to 10% in 2008.
Dong suggested that regulating air conditioners through refrigerant controls and energy efficiency standards, as done in other countries, is more effective. Vietnam already enforces refrigerant import quotas and minimum energy efficiency standards, which Dong believes make the SCT unnecessary.
Rising refrigerant costs and stricter energy regulations already act as deterrents, making additional taxation redundant, Dong stated.
In contrast, Deputy Hoang Van Cuong from Hanoi City emphasized that the SCT’s primary goal is to influence consumer behavior by discouraging the use of luxury products. He questioned whether taxing air conditioners achieves this purpose, noting that it would neither reduce their usage nor promote alternatives.
Cuong proposed shifting the focus of the SCT to alcohol, tobacco, and other products with negative health impacts. He suggested phased increases, starting with a 10-15% hike, followed by adjustments every five years.
This approach, combined with public awareness campaigns, would encourage behavioral changes and more responsible production, Cuong said. He also recommended taxing alcohol based on strength, with higher rates for stronger beverages.
