Carbonated soft drinks will not be subject to excise tax; Resolution 56

CSD Public Hearing, Ha Long, July 4, 2014The Government decided not to add carbonated soft drinks to the list of items subject to excise tax (special consumption tax) for discussions by National Assembly deputies this October, following extensive consultations and public hearings where stakeholders expressed their viewpoints. (see photo). The decision was published in Resolution 56/NQ-CP, 4 Aug 2014 following the July 30-31, 2014 regular meeting of the Government.

According to Resolution 56/NQ-CP, 4 Aug 2014, on the basis of discussion by members of the Government and the decision of the Prime Minister at the regular Government meeting on Jul 30, 31 2014, the Government decided:

8. On the draft law amending and supplementing a number of articles of the Law on Special Consumption Tax (Excise Tax): The Government agreed on the content of the draft Law as follows: Not to include carbonated soft drinks on the list of items subject to excise tax; regulations governing the increase of excise taxes on tobacco, beer, must follow a roadmap in accordance with the actual situation in order to ensure both a contribution to protecting the health of consumers and at the same time to create favorable conditions for domestic production.

The Ministry of Finance shall assume the prime responsibility and coordinate with the Ministry of Justice, the Government Office and relevant agencies to collect opinions from Cabinet members to revise and perfect the draft Law. The Minister of Finance is authorized by the Prime Minister, to represent the Government and report to the National Assembly.

8. Về dự án Luật sửa đổi, bổ sung một số điều của Luật thuế tiêu thụ đặc biệt:

Chính phủ thống nhất nội dung của dự án Luật sửa đổi, bổ sung theo hướng: Chưa đưa mặt hàng nước ngọt có ga không cồn vào đối tượng chịu thuế tiêu thụ đặc biệt; quy định điều chỉnh tăng thuế suất thuế tiêu thụ đặc biệt đối với thuốc lá, bia nhưng phải theo lộ trình phù hợp với tình hình thực tế để bảo đảm vừa góp phần bảo vệ sức khỏe người tiêu dùng vừa tạo thuận lợi cho sản xuất trong nước.

Giao Bộ Tài chính chủ trì, phối hợp với Bộ Tư pháp, Văn phòng Chính phủ và các cơ quan liên quan tiếp thu ý kiến thành viên Chính phủ, chỉnh lý, hoàn thiện dự án Luật. Bộ trưởng Bộ Tài chính thừa ủy quyền Thủ tướng Chính phủ, thay mặt Chính phủ trình Quốc hội.


According to news reports in the Saigon Times and other newspapers (see links below), at a regular Government meeting in July , the Finance Ministry suggested imposing a consumption tax rate of either 10% or 0% on carbonated soft drinks. The ministry asked the Government for approval not to apply the 10% special consumption tax rate as this is in line with the country’s integration into the word’s economy.

According to the Saigon Times, “The Ministry of Planning and Investment considered the Finance Ministry’s proposal and explanation as unconvincing, casting doubt on the argument about the negative impact of carbonated soft drinks on consumer health.

“The Ministry of Trade expressed concerns that the special consumption tax would hit both foreign and domestic producers of carbonated soft drinks if such a tax would be levied.”

At a public hearing organized in Ha Long by the National Assembly Finance and Budget Committee on July 4, (see photo), according to media reports, …

“Deputy Head of Viet Nam Food Association, the Ministry of Health Nguyen Hung Long, said that carbon dioxide, preservatives, sweeteners and food colorants in carbonated drinks were already tested by the FAO/WHO Codex Committee. These food additives were proven not to cause health risks if the use of additives followed Codex standards.

“Vo Thi Lan Phuong, managing director of Vriens & Partners said that the draft amendment should include proposals to exempt or impose excise tax on soft drinks, regardless whether they were carbonated. She said that the explanations by amendment makers on the health risks were not clear.

Excise tax on carbonated drinks would be unfair and reflect poorly on the draft makers, said Nguyen Duc Kien, deputy head of the National Assembly’s Economic Affairs Committee. He said all soft drinks contained sugar or sweeteners, therefore if the ministry aimed to raise budget money with the tax, it should impose the tax on all canned drink products.

“Deputy Head of the National Assembly’s Budget and Finance Committee said decision makers would need to listen to more parties before ratifying the amendment.”

The Ministry of Finance and Government decision came after extensive consultations by agencies with stakeholders, and several public hearings organized by the Vietnam Business Forum, the Office of Government, and the National Assembly Finance and Budget, and Economic Committees to hear the viewpoints of government agencies and stakeholders from the business community and consumer groups, as well as international health and tax experts, etc.

These hearings were in line with the Prime Minister’s New Year Message 2014, where he said, “The interaction between State agencies, between the State apparatus and socio-political organizations must be strengthened. Dialogues with the people and businesses must be expanded under various forms to promote closer relationship between the State, cadres, civil servants and the people and better match policy and legislation with reality.”

Read more …
No special consumption tax for carbonated soft drinks, Saigon Times,Aug 1, 2014
Không thu thuế tiêu thụ đặc biệt đối với nước ngọt có ga, SaigonTimes, Jul 30, 2014
Nước ngọt sẽ không phải chịu thuế tiêu thụ đặc biệt, VnExpress Kinh Doanh, Aug 1, 2014
Nước ngọt có gas có thể không bị áp thuế tiêu thụ đặc biệt, Jul 11, 2014

Agendas at Consultations and Public Hearings
Agenda, Office of Government Public Hearing, HCM City, Apr 11, 2014
Agenda, Office of Government Public Hearing, Vinh Phuc, May 19, 2014
Agenda, National Assembly Finance & Budget Committee Public hearing, Jul 4, 2014
Agenda, National Assembly Finance & Budget Committee Public Hearing, Aug 8, 2014

Representative Communications
Letter re Proposed Excise Tax on Carbonated Soft Drinks (ENG | VIE), Jan 24, 2014
Forum on Vietnam’s Food & Beverage Industry Sector (Ha Noi), Mar 28, 2014
Letter re Proposed Excise Tax on Carbonated Soft Drinks, Jun 2, 2014

Prime Minister’s New Year Message, 2014
Prime Minister Nguyen Tan Dung’s New Year Message, Jan 1, 2014
Thông điệp năm mới của Thủ tướng Nguyễn Tấn Dũng, Jan 1, 2014

Published: Aug 3, 2014. Updated: Aug 10, 2014

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