Vietnam: Ministry proposes special consumption tax on sugared beverages

• Feb 24, 2023

The Ministry of Finance has proposed to apply a special consumption tax on sugar-sweetened beverages to protect people’s health following recommendations from the World Health Organisation.

According to the ministry, Vietnam has seen a sharp seven-fold in the consumption of sugar-sweetened beverages in the past 15 years, from an average of 6.60 litres per person in 2002 to 46.50 litres per person in 2017, and to 50.70 litres per person in 2018. The country produced 1.50 billion litres of sweetened drinks in 2020.

The ministry also raised concerns over the rising number of overweight and obese children according to a survey by the National Institute of Nutrition.

“WHO has called on countries to encourage people to eat healthy foods, and apply a special consumption tax on sugar-sweetened beverages to raise consumer awareness,” the ministry said.

This is not the first time the ministry proposed a tax on sweetened drinks. It first proposed a 10 percent special consumption tax on sugar-sweetened beverages in 2014 but faced strong opposition from other ministries who said the tax was impractical and would badly affect businesses.

In addition to the tax on sweetened drinks, the Ministry has also proposed to raise the special consumption tax on tobacco, liquor, and beer.

“Although the tax on tobacco, liquor, and beer has gradually increased over the years in Vietnam, it is still low compared to many other countries,” the ministry said. “Tax on liquor and beer currently makes up just 30 percent, and tobacco 35 percent of retail prices, compared to between 40-85 percent in many other countries, Meanwhile the consumption of these products have kept rising. Vietnam currently tops Southeast Asia and ranks third in Asia in beer consumption. The smoking rate among men in Vietnam was still high at 42.30 percent in 2020, according to the Ministry of Health.”

Source: Dtinews