Proposed excise tax on carbonated soft drinks may be reconsidered

Feedback sought on tax exemption for fizzy drinksViet Nam’s policy-makers may reconsider a proposal to impose a 10% excise tax on carbonated soft drinks.

A draft amendment by the Ministry of Finance to the Excise Tax Law included carbonated soft drinks in a list of products subject to the tax. The ministry claimed that “as these drinks posed a health risk, the tax would help prevent the risk and substantially increase government revenue.”

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 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.

Read more …

Feedback sought on tax exemption for fizzy soft drinks, Vietnam News, Jul 16, 2014

AmCham statement at National Assembly public hearing regarding the proposed amended Excise Tax Law, including proposed excise tax of 10% on carbonated soft drinks, Ha Long, Jul 4, 2014.

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