The Ministry of Finance still wants to impose special consumption tax on soft drinks.

In the latest draft, the Ministry of Finance still proposes to impose special consumption tax on sugary soft drinks, except for milk and nutritional drinks.

This content is stated in the draft Law on Special Consumption Tax sent by the Ministry of Finance to the Ministry of Justice for review. The new point is that the Ministry of Finance changes the concept of "sugary drinks" to "sugary soft drinks according to Vietnamese Standards (TCVN)" after receiving comments from businesses, to apply special consumption tax.

Accordingly, sugary drinks are still subject to special consumption tax, but milk and dairy products will not be subject to this tax because they are not soft drinks according to TCVN and are nutritional health products.

In addition, liquid foods used for nutritional purposes such as natural mineral water and bottled drinking water; fruit and vegetable juices and nectars of vegetables, fruits and cocoa products are also not subject to tax.

Thus, sugary beverage products according to TCVN, including carbonated soft drinks, tea, coffee, fruit juice; energy drinks, electrolyte drinks, sports drinks, and other types of water will be subject to special consumption tax.

The Ministry of Finance said it will study special consumption tax rates on soft drinks based on sugar content, in order to encourage businesses to produce and import soft drinks with low sugar content.

Some sugary drinks consumed in Vietnam. Photo: Anh Tu — Some sugary drinks consumed in Vietnam. Photo: *Anh Tu*

Stating the previous point of view, many associations and businesses oppose the imposition of special consumption tax on sugary drinks. According to them, it does not help solve the problem of overweight and obesity, but creates a discriminatory tax policy. Not to mention, this policy will cause unwanted consequences for other related industries, such as sugar cane, retail, and packaging.

Regarding this issue, the Ministry of Finance said that taxing sugary drinks has become a common trend. The World Health Organization - WHO has recommended that governments take action to encourage people to access healthy foods by taxing sugary drinks, to guide consumption.

Countries have gradually added sugary soft drinks to their excise tax. There are now about 85 countries that impose this tax, up nearly sixfold from 10 years ago.

The tax has been effective in reducing sugar consumption, according to the Ministry of Finance. For example, in Mexico, after two years of implementation, households reduced their purchases of sugary drinks by 12%, increasing tax revenue by $2.6 billion. In ASEAN, 6 out of 10 countries including Thailand, the Philippines, Malaysia, Laos, Cambodia, and Myanmar have collected special consumption taxes on sugary drinks.

In addition, in the draft, the Ministry of Finance also wants to include barley and non-alcoholic beverages in the list of subject to special consumption tax to guide consumption.

This agency believes that the current market imports non-alcoholic beverages that are produced using the same process and ingredients as beer (after the fermentation process, alcohol is separated from the product and natural flavors are added).

However, the company explained that the similarities in ingredients, processes, forms, and flavors are not a legal basis for imposing special consumption tax. It is also inconsistent with the purpose of this tax, which is to limit or discourage the consumption of products harmful to health.

Quynh Trang

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