Vietnam chews over special consumption tax on sugary drinks

By Thanh Thanh Lan   August 15, 2017 | 07:50 pm PT
The tax could help combat the country's rapidly increasing obesity rate.

The Ministry of Finance on Tuesday proposed levying a special consumption tax on a range of sweetened beverages. If approved, the proposal would see the tax imposed on carbonated and non-carbonated soft drinks, energy drinks, sports drinks and bottled instant coffee and tea.

The ministry has suggested either a 10 percent or a 20 percent rate for the new sugary drink tax to be applied from 2019, with 10 percent being the preferred option.

“The tax will help regulate the consumption of sweetened beverages, and it's also an international norm,” the proposal said.

A can of carbonated soft drink, for example, currently costs around VND10,000 ($0.44).

At Tuesday's press conference, the ministry cited a report by the World Health Organization (WHO) that shows excessive consumption of sugary drinks can lead to obesity. Obesity, in turn, has been linked to many health risks such as cardiovascular disease, hypertension and strokes.

Meanwhile, a study unveiled in June found that about 25 percent of Vietnamese adults are overweight or obese. The obesity rate for children under 5 years old is also rising fast.

Many Southeast Asian countries have already imposed sugary drinks taxes, according to the ministry. The current rate is 20-25 percent in Thailand, 5-10 percent in Laos and 10 percent in Cambodia.

Myanmar, the Philippines and Indonesia are also considering imposing the tax.

In Vietnam, special consumption taxes are levied on items and services considered unhealthy or luxurious such as tobacco, alcoholic drinks and cars.

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