The Government has aligned on not adding new content regarding the calculation of mixed taxes for beer and alcohol products to the proposal. (Photo: anninhthudo.vn) This was stated in the newly-promulgated Resolution No 25/NQ-CP onthe building of the amended Law on Special Consumption Tax.
According to the resolution, the Government basically agreed withthe content of receiving, explaining, and revising the dossier proposing todevelop the amended Law on Special Consumption Tax in Report No 25/TTr-BTCwhich was submitted by the Ministry of Finance (MoF) on February 6, 2024.
It does not add new content regarding the calculation of mixedtaxes for beer and alcohol products to the proposal.
This decision is made in accordance with the PrimeMinister-approved tax system reform strategy by 2030 and the country'scommitments upon joining the World Trade Organisation (WTO).
Regarding the progress of submitting the law project, theresolution clearly stated that the Government has proposed to the NationalAssembly Standing Committee to include the law project in the 2024 Law andOrdinance development programme during the 7th session in May 2024.
Comments will be sought from the National Assembly on the lawproject during the 8th session in October and approve it during the 9th sessionin May 2025.
This decision is made in accordance with the PrimeMinister-approved tax system reform strategy by 2030 and the country'scommitments upon joining the World Trade Organisation (WTO).
Regarding the progress of submitting the law project, theresolution clearly stated that the Government has proposed to the NationalAssembly Standing Committee to include the law project in the 2024 Law andOrdinance development programme during the 7th session in May 2024.
Comments will be sought from the National Assembly on the lawproject during the 8th session in October and approve it during the 9th sessionin May 2025.
At the same time, the Government has tasked the Ministry ofFinance with finalising the law-making proposal documents and submitting themto the Ministry of Justice for the necessary procedures to add this law projectto the 2025 Law and Ordinance development programme. Additionally, adjustmentswill be made to the 2024 and 2025 Law and Ordinance development programmes.
Previously, there was a concern among businesses and expertsregarding a regulation in the proposed amendment to the Law on SpecialConsumption Tax. The concern revolved around whether to include an absolute taxcalculation method and a mixed tax calculation method or not.
Experts point out that relative, absolute and mixed taxcalculations each have their own advantages and disadvantages. Specifically,the absolute tax calculation method is favoured for its simplicity and ease ofimplementation.
Many countries have utilised this method to restrict theproduction and consumption of items that are detrimental to health. However, amajor shortcoming is that it fails to adjust adequately to price fluctuationsduring periods of inflation or deflation.
On the other hand, we have not currently applied the mixed orabsolute tax calculation method for alcohol and beer products, so theadvantages of this method are still in the research process, but in practice ithas not been proven.
If an absolute tax rate is applied on the number of litres ofproduct, the price of high-end lines will be more profitable, while the priceof popular lines which Vietnamese enterprises account for the majority will bepushed up, thereby affecting production and the competitiveness of Vietnamesebeer producers.
As for the mixed tax regime, the special consumption tax onpremium beer products will increase from 65 to 75%. Meanwhile, popular beerwill be increased from current 65 to 85%. Therefore, low-income consumers are subjectto higher taxes than high-income consumers./.
Previously, there was a concern among businesses and expertsregarding a regulation in the proposed amendment to the Law on SpecialConsumption Tax. The concern revolved around whether to include an absolute taxcalculation method and a mixed tax calculation method or not.
Experts point out that relative, absolute and mixed taxcalculations each have their own advantages and disadvantages. Specifically,the absolute tax calculation method is favoured for its simplicity and ease ofimplementation.
Many countries have utilised this method to restrict theproduction and consumption of items that are detrimental to health. However, amajor shortcoming is that it fails to adjust adequately to price fluctuationsduring periods of inflation or deflation.
On the other hand, we have not currently applied the mixed orabsolute tax calculation method for alcohol and beer products, so theadvantages of this method are still in the research process, but in practice ithas not been proven.
If an absolute tax rate is applied on the number of litres ofproduct, the price of high-end lines will be more profitable, while the priceof popular lines which Vietnamese enterprises account for the majority will bepushed up, thereby affecting production and the competitiveness of Vietnamesebeer producers.
As for the mixed tax regime, the special consumption tax onpremium beer products will increase from 65 to 75%. Meanwhile, popular beerwill be increased from current 65 to 85%. Therefore, low-income consumers are subjectto higher taxes than high-income consumers./.
VNA
