Alcoholic drink producers want tax hikes delayed

By Anh Minh   February 27, 2023 | 06:51 pm PT
Alcoholic drink producers want tax hikes delayed
Customers hold glasses of beer at a restaurant in Hanoi. Photo by Reuters/Kham
The Vietnam Beer, Alcohol & Beverage Association has called for delaying a proposed tax increase on liquor saying the industry has yet to recover from the effects of Covid.

The association president, Nguyen Van Viet, called for putting off the tax hike until at least 2025, saying the alcohol industry has yet to recover after being affected by the Covid pandemic for nearly three years.

Besides, the prices of raw materials such as malt and fuel have risen by at least 20% and the conflict between Russia and Ukraine has disrupted supply chains, he said.

However, prices have not been hiked and so increasing taxes during this period of recovery would aggravate their difficulties, he claimed.

The association also wanted the imposition of special consumption tax on sugary drinks delayed until late 2024 or mid-2025.

When the tax imposed, the rate should be calculated based on the sugar content in the drinks, it said.

The Ministry of Finance is soliciting opinions from various stakeholders about increasing the special consumption tax on alcoholic drinks this year.

Currently the tax rates stand at 65% on beer and 35-65% on liquor depending on the alcohol content.

In 2014 the ministry had proposed a 10% special consumption tax on sweetened beverages saying consuming less sugar would help prevent people, especially children, from becoming obese, but other ministries had opposed it.

The Ministries of Planning and Investment and Justice had said the argument for the tax was not convincing, and the Ministry of Industry and Trade said it could have a negative impact on businesses.

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