Proposal on imposition of excise tax on soft drinks needs to be reconsidered?
By Tieu Phong
October 09, 2017 | 07:43 AM GMT+7
The Chamber of Commerce and Industry of Vietnam (VCCI) proposed that the imposition of excise tax on soft drinks should be postponed until there is a comprehensive study which presents fully the effectiveness of excise tax imposition on obesity reduction in Vietnam.
Imposition of excise tax on soft drinks is proposed. Photo: http://bizlive.vn
On August 17, the Ministry of Finance (MoF) submitted to the National Assembly a draft amending five Laws, including Laws on value added tax, corporate income tax, personal income tax, excise tax and resource tax.
According to VCCI, the proposal that 10 per cent of excise tax should be imposed on soft drinks aims to protect the health of the people due to the impact of overweight and obesity. This is a reasonable purpose for public health and interests.
However, there is no concrete assessment of whether this imposition will reduce or slow down the rate of obesity in Vietnam. This is the most important factor to consider in terms of the effectiveness of tax policy.
Furthermore, it is also necessary to anticipate some of the negative impacts caused by the imposition. These impacts may affect the consumption capacity of households in rural, remote and isolated areas and enterprises and farmers involved in some agricultural sectors negatively.
Therefore, VCCI proposed that imposition of excise tax on soft drinks should be postponed until there is a comprehensive study on obesity status and the effectiveness of imposition on obesity reduction in Viet Nam.
If the study proves that imposition helps reduce obesity, excise tax should be imposed on drinks that are high in sugar, exceeding the allowable limit. This measure helps not only avoid the imposition on some products with natural sugar content that the manufacturers cannot separate, but also suit the purpose of imposition because drinks with low sugar content do not cause obesity.
Moreover, it is necessary to define more clearly the concepts of 100-per cent natural fruit juice, milk, milk coffee, milk tea, fruit milk ...
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