Higher excise tax proposed

The Ministry of Finance has proposed slapping higher excise tax on unhealthy products such as cigarettes, beers and alcoholic beverages, and adding sugary drinks to the list as well.

The ministry is seeking feedback on the proposal to work out the revised law on excise tax to encourage people to use eco-friendly products and limit the consumption of unhealthy products.

According to the ministry, despite the increase in excise tax, the smoking rate has remained high, with 42.3% of Vietnamese men smoking in 2020. Alcoholic consumption has also been on the rise in recent years. Vietnam is the largest beer consumer in Southeast Asia and the third largest beer consumer in Asia. In 2019, the average beer consumption per person was 47.6 liters and alcohol consumption 3.4 liters.

The ministry cited data from the World Health Organization that sugary drinks are the main cause of obesity, heart disease, diabetes and other diseases. The number of overweight Vietnamese adults (over 18 years) increased by 68% between 2002 and 2016.

Its figures show that sugary drink consumption in Vietnam surged 15 times over the past 16 years, from 6.6 liters per person in 2002 to 50.7 liters per person in 2018, and the consumption has been rising.

Therefore, the ministry proposed increasing excise tax on those unhealthy products and including sugary drinks in the list of the products under this tax.

On the other hand, the ministry proposed reducing excise tax on environmentally friendly products such as hybrid vehicles powered by both gasoline and electricity, electric vehicles, and natural gas vehicles.