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Vietnam: MoF proposes a hike in special consumption tax on cigarettes, beer, and spirits

The ministry is collecting public opinions on the proposal to develop the revised Law on Special Consumption Tax in which the SCT applied in these products should be increased, saigondautu.com.vn reported.

HÀ NỘI — The Ministry of Finance has proposed to increase the special consumption tax (SCT) on a number of items harmful to health including tobacco, beer, and alcoholic products to limit imports, production and consumption.

The ministry is collecting public opinions on the proposal to develop the revised Law on Special Consumption Tax in which the SCT imposed on these products should be increased, saigondautu.com.vn reported.

In addition, the ministry also proposed to add new tobacco products and new equipment and trading in online video game services to be subject to excise tax, according to the online newspaper.

The MoF said the taxes on alcohol and beer in Việt Nam are still low. Currently, the country applies an excise tax on alcohol of 35-65 per cent, beer 65 per cent and cigarettes 75 per cent.

According to the World Health Organisation calculations, the tax rate only accounted for about 30 per cent of the retail price, compared to 40-85 per cent recorded in many countries.

Though the SCT on alcohol and beer products had increased from 2016 to 2018, Việt Nam was still the highest beer consumer in Southeast Asia and the third in Asia after Japan and China. In 2019, the average beer consumption per person was 47.6 litres, 1.2 times the number of 2015 while the consumption of spirits and white wine per person was 3.4 litres, 1.02 times the 2015 figure.

Meanwhile, tobacco taxes accounted for approximately 38.85 per cent of the retail sale price of cigarettes in Việt Nam, much lower than 50-80 per cent seen in other countries such as Thailand (70 per cent), Singapore (69 per cent), France (80 per cent).

The World Health Organisation and the World Bank have recommended that the proportion of consumption tax should account for 66-75 per cent of the retail price of cigarettes. — VNS