Fizzy drinks excise tax threat falls flat: Vietnam Investment Review

F&B Forum, Mar 28, 2014The American Chamber of Commerce and Vietnam Chamber of Commerce & Industry recently organized a forum on Vietnam’s food and beverage industry to canvas opinion on the Ministry of Finance’s recent draft amendment to the Excise Tax Law, adding non-alcoholic carbonated drinks to the list of products subject to an excise tax rate of 10 per cent. The ministry claimed that the tax would substantially increase governmental revenue. However, many industry players have opposed the proposal.

“With the perspective on the democratic and transparent policy-making process, as ‘the state must ensure and bring into full play the real mastership right of the people, particularly the right to participate in the policy-making process,’ let’s talk about the consumers first. Excise taxes are designed to be imposed on luxury goods, products and services used by high-income consumers. Later, such taxes were imposed on goods that pose a health or environmental risk. But they were never imposed on basic needs. That is how the tax is supposed to work, to maintain a balance between the imposition of charges between low-income consumers and high-income consumers, between consumers with healthier habits and those without them. Therefore, imposing excise taxes on an everyday product such as a fizzy soft drink is tremendously unfair to the average consumer.”

“This is a tax on carbonated beverages. Sweetened drinks without CO2 will not be taxed under this proposal. This makes it a very strange and unusual tax. No other country in the world singles out CO2 for taxation. A few countries do have excise taxes on high-calorie drinks, but no country taxes drinks just because they contain CO2. There is no research that supports the claim that CO2 causes health problems. In fact, medical research shows that CO2 is actually good for your health. CO2 gas expands in your stomach. This makes you feel full faster, so you don’t eat as much. When you drink sweetened tea or fruit drinks without CO2, you don’t feel so full because the drink has no CO2 to expand in your stomach, so you eat and drink more.”

Read more …

“Fizzy drinks excise tax threat falls flat,” Vietnam Investment Review, Apr 8, 2014

Forum on Vietnam’s Food and Beverage Industry, Mar 28, 2014 – Presentations
Introduction, Herb Cochran Text – EN | Slides – EN | Slides – VN
Food and Beverage Industry in Vietnam: Domestic and International Perspectives, Ph.D. Phan Huu Thang EN|VN
Regulatory Harmonization and F&B Sector in Vietnam, Van Nguyen EN|VN
Proposed Amendments in the Draft SCT Law: Health, Economic, Legal Perspectives, Sesto Vecchi EN|VN
Global Experience: Carbonated Beverage Taxes & Lessons, Christopher J. Snowdon EN|VN
Carbonated Beverages and Health Questions: Fact and Fiction, Dr. Mason Cobb EN|VN
Economic and Social Implications of SCT Law on Essential Consumer Goods, Ph.D. Tran Kim Chung EN|VN