HCMC to use its autonomy to raise alcohol tax

By Trung Son   April 4, 2019 | 08:00 pm GMT+7
HCMC to use its autonomy to raise alcohol tax
People have alcohol drinks at a restaurant along Bui Vien Street in the backpacker precinct of Ho Chi Minh City. Photo by VnExpress/Thanh Nguyen

HCMC is planning to use its autonomy, granted in 2017, to increase the special consumption tax on alcoholic drinks.

The city will base its proposal on very careful studies so that it carries the public along, HCMC Vice Chairman Tran Vinh Tuyen said Wednesday. He did not elaborate.

Since January 1 last year, the special consumption tax (SCT) has stayed at 65 percent on liquor with alcohol content of above 20 degrees and 35 percent on liquor with alcohol content below.

Ho Chi Minh City, the country’s largest metropolis, was granted autonomous decision-making power in September 2017 to help it develop to its full potential.

In accordance with the relevant government decision, the city can raise and add additional fees and charges to regulate its residents’ behaviors and increase its budget revenue at the same time; as well as increase the SCT on some items such as alcohol and cigarettes. It can also levy higher or lower environmental taxes.

The megacity of 13 million people is among the 20 percent of localities in Vietnam that can cover their own expenditures and contribute to the national coffers.

HCMC was also the country’s largest moneymaker last year, by earning more than VND378 trillion ($16.3 billion), up 8.6 percent from 2017.

Data collected by the Ministry of Health shows Vietnamese citizens consumed 305 million liters of hard liquor and 4.1 billion liters of beer in 2017, making it the biggest alcohol consumer in Southeast Asia and third biggest in Asia after Japan and China.

In 2017, Vietnamese people spent close to $4 billion on alcohol. The cost of dealing with alcohol-related traffic accidents was estimated at about one percent of the GDP the same year. The figure translates to a per capita spending of $300, against the $113 spent on healthcare, according to the ministry.

Last year, the Ministry of Health proposed a draft law on preventing adverse effects of alcoholic drinks, which includes options for limiting the sale of alcoholic drinks at night, and a ban on using booze in promotional campaigns and advertisements of heavy alcoholic drinks.

 
 
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