Finance ministry eyes 10% tax on sweetened beverages

If their prices rise by 10%, consumers might switch to products with less or no added sugar, it said in its latest bill on special consumption tax.

"[This] will help reduce obesity, diabetes and other diseases, especially among the younger generations. This in turn will ease the pressure on the healthcare system."

The tax would bring VND2.4 trillion ($94 million) to the government in the first year before declining as the focus shifts to products with less or no sugar, it said.

It cited data from the National Institute of Nutrition to show that the annual per capita consumption of sweetened beverages rose by nearly 1.5 times in seven years to 70.56 liters in 2020.

The ratio of overweight and obese children and teenagers (aged 5-19) had doubled in 10 years to 19% in 2020, higher than the Southeast Asian average of 17.3%.

Taxing sweetened beverages is a global trend, and 85 countries now do so, six times the number a decade ago, it added.

Beverage producers last year lobbied against the tax, claiming they do not contribute to health problems such as obesity.