Proposal to impose a special consumption tax on sugary drinks

The Ministry of Finance is seeking comments on the draft Law on Special Consumption Tax (amended). Regarding subjects to special consumption tax, the Ministry of Finance said: The current law on special consumption tax stipulates 10 groups of goods and 6 groups of services subjects to special consumption tax. To expand the tax base, synchronize with relevant specialized laws and codify regulations that are being stably implemented in sub-law documents (Decrees, Circulars), the Ministry of Finance proposes:

For goods subject to special consumption tax

The revised draft clearly stipulates that "cigarettes, cigars and other products from the tobacco plant used for smoking, inhaling, chewing, sniffing and sucking" will become "cigarettes according to the provisions of the Law on Prevention and Control of Harmful Effects of Tobacco, including cigarettes; cigars; tobacco or other forms of tobacco used for smoking, snorting, sniffing, and sucking" to comply with the Law on Prevention and Control of Harmful Effects of Tobacco.

Amend the regulation clearly stating the product "alcohol" to "alcohol according to the provisions of the Law on Prevention and Control of Harmful Effects of Alcohol and Beer, including other types of alcoholic beverages and foods fermented from fruits and grains; beverages prepared from food alcohol" to synchronize with the Law on Prevention and Control of Harmful Effects of Alcohol and Beer.

Amending and supplementing regulations on "cars with less than 24 seats, including cars carrying both people and goods with two or more rows of seats, with a fixed partition design between the passenger compartment and cargo compartment" to "motor vehicles with less than 24 seats, including: passenger cars; four-wheeled passenger cars; passenger pick-up cars; double cabin row; cars that carry both passengers and cargo with two or more rows of seats, with a fixed partition design between the passenger compartment and the cargo compartment" to be consistent with Vietnamese Standards on automobiles and regulations on four-wheeled passenger vehicles with motors of the Ministry of Transport.

The draft proposes to replace the regulation on "aircraft" with the regulation on "airplanes, helicopters, gliders" and add clear guidance on aircraft, helicopters, gliders and yachts subject to special consumption tax are those that used for civil purposes, in order to clarify the subjects to special consumption tax are motorized aircraft and high-end goods serving the personal consumption of high-income individuals in society.

Revised regulations clearly stipulate that air conditioners with a capacity of 90,000 BTU or less are subject to special consumption tax as follows: "Air conditioners with a capacity of 90,000 BTU or less, except for those designed by the manufacturer for installation only on means of transport include cars, railway carriages, ships, boats, and airplanes. In cases where organizations and individuals produce and sell or organizations and individuals import and separate each part as hot or cold parts, then goods sold or imported (hot and cold units) are still subject to special consumption tax like finished products (complete air conditioners)" to legislate regulations that are being stably implemented in Sub-Law documents.

Amend the clear regulation of "votive goods" subject to special consumption tax do not include votive goods that are children's toys and teaching aids to legislate the regulations that are being stably implemented in the Sub-Law documents.

At the same time, the draft adds beverages according to Vietnamese Standards (TCVN) with sugar content above 5g/100ml, to be subject to special consumption tax to implement the Party and State's guidelines on protection of and care for people's health, recommendations of the World Health Organization (WHO), the United Nations Children's Fund UNICEF and the Ministry of Health on the reality of diseases related to sugary beverages in Vietnam, to promptly prevent and reduce the alarming situation of overweight and obesity in children and adolescents, to prevent and reduce disease risks and medical burden of non-communicable diseases, raise awareness and limit consumption of sugary beverages, bringing benefits to public health, especially for young people, the nation's future generations, in accordance with international practices.