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Calls made to avoid “unfair” tax methods
Vietnam’s legislature is closer to discussing an excise tax on beverages, which could drastically affect beers and spirits businesses depending on what direction is taken.
A government report sent to the National Assembly last week stated that during the process of proposing the development of the revised Law on Special Consumption Tax, suggestions were made for further research on compound tax method for beers and spirits.
Specifically, some traders and importers of high-end alcohol from the United Kingdom and France proposed a compound tax on spirits. For beer, only HEINEKEN’s Vietnam brewery suggested similar.
However, state capital investment corporations, the Vietnam Association of Foreign-Invested Enterprises, the Vietnam Association of Financial Investors, and more than 20 alcohol production enterprises said a compound tax method should not be applied.
The Ministry of Finance explained that up to 80 per cent of the domestic beer market share is popular or local beer, with a huge price difference compared to premium beer. Therefore, if specific tax and compound tax methods were applied, it would lead to unfair taxation in which popular beer businesses would have to pay more tax, and the decrease in revenue could indirectly affect social security and jobs.
Nguyen Van Phung, former director of the Department of Tax Administration for Large Enterprises under the General Department of Taxation, said that each tax calculation method has advantages and disadvantages. Each country will depend on its situation, including the level of taxpayers’ self-awareness and market transparency.
“From a comprehensive perspective, of individuals as well as researchers, I see that the latest draft has made some progress,” he said.
He explained that in Vietnam, if the specific tax and compound tax are immediately applied, it will cause shock and damage to businesses and consumers. “This is because most of us have average incomes, and not enough finances to consume the high-price segment. Therefore, the current tax method is more reasonable,” Phung said.
Vietnam currently applies an excise tax of 35-65 per cent on spirits and 65 per cent on beer. The MoF has proposed adjusting the rates following a roadmap from 2026 to 2030. The retail price will increase by 10 per cent according to recommendations made by World Health Organization, and the draft law will be discussed by the National Assembly in October.
Vietnam is expected to reach a production output of 4.6 billion litres of beer in 2025, 350 million litres of spirits, and 9.1 billion litres of soft drinks. The industry will achieve an export turnover of $600 million.
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