What are the solutions for excise tax policy reform according to the tax reform strategy until 2030 in Vietnam?

What are the solutions for excise tax policy reform according to the tax reform strategy until 2030 in Vietnam?

According to Point b Clause 1 Section 3 Article 1 of Decision 508/QD-TTg 2022, the solutions for excise tax policy reform according to the tax reform strategy until 2030 in Vietnam are as follows:

Review and study any amendments and supplements to taxable items or objects to regulate consumption according to the shift in social consumption trends and the guidelines of the Party and the State on protection of public health and environment;

Develop a roadmap for increase in taxes on tobacco, beer and alcohol products to limit production and consumption thereof and fulfill international commitments;

Review any adjustment in rates of the excise tax on a number of items to suit socio-economic condition in the 2021 - 2030 period;

Study the application of a combination of proportional tax rate and absolute tax rate to a number of goods and services subject to the excise tax;

What are the solutions for excise tax policy reform according to the tax reform strategy until 2030 in Vietnam? (Image from the Internet)

What are the objects subject to excise tax in 2024 in Vietnam?

Under Article 2 of the Law on excise tax 2008 and Article 2 of Decree 108/2015/ND-CP, the objects subject to excise tax include:

(1) Goods subject to excise tax:

- Cigarettes, cigars, and other tobacco products used for smoking, inhaling, chewing, sniffing, or sucking;

- Alcohol;

- Beer;

- Passenger cars with fewer than 24 seats, including those designed for both passenger and cargo transport with two or more rows of seats, with a fixed partition between the passenger and cargo compartments;

- Motorbikes with engine capacity above 125cm³, including two-wheeled and three-wheeled bikes;

- Aircraft and yachts (used for civil purposes);

- Various types of gasoline;

- Air conditioners with a capacity of 90,000 BTU or less;

- Playing cards;

- Joss paper and votive objects (excluding children’s toys and educational equipment).

Note: Goods subject to excise tax must be complete products and not include components for assembling such goods.

(2) Services subject to excise tax:

- Nightclub businesses;

- Massage, karaoke businesses;

- Casino businesses; prize-winning electronic games, including jackpot machines, slot machines, and similar types of machines;

- Betting businesses (including sports betting, entertainment betting, and other forms of betting as prescribed by law);

- Golf businesses, including selling membership cards and golf playing tickets;

- Lottery businesses.

What imported goods are subject to excise tax exemption in Vietnam?

According to Clause 2 Article 3 of Circular 195/2015/TT-BTC, the following imported goods are exempt from excise tax:

- Humanitarian aid, grant aid, gifts, including:

+ Humanitarian aid and grant aid, including imported goods funded by grant aid approved by a competent authority; humanitarian aid and emergency assistance for recovery from wars, natural disasters, epidemics.

+ Gifts of overseas entities for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, the people’s armed forces.

+ Gifts for Vietnamese individuals within the allowance imposed by law.

- Goods transited through Vietnam, including:

+ Goods transported from the exporting country to the importing country through Vietnam’s checkpoint without following procedures for import into Vietnam and procedures for export from Vietnam.

+ Goods transported from the exporting country to the importing country through Vietnam’s checkpoint and moved to a bonded warehouse without following procedures for import into Vietnam and procedures for export from Vietnam.

+ Goods transited through Vietnam’s border checkpoint or border under an International Agreement between Vietnam and another country or between the agencies and representatives authorized by Vietnam’s government and the other country’s government.

+ Goods transported from the exporting country to the importing country passing through Vietnam’s checkpoint.

- If temporarily imported goods are re-exported within the period over which import duties are exempt according to regulations of law on export and import duties, SET on the re-exported goods shall not be paid.

If temporarily exported goods are re-imported within the period over which export duties are exempt according to regulations of law on export and import duties, SET on the re-imported goods shall not be paid.

- Goods temporarily imported to attend a fair or exhibition and re-exported within the period over which import duties are exempt. If such goods are not re-exported after the end of the fair or exhibition, SET shall be paid. If the tax authority finds that a taxpayer fails to declare such amount of SET, such tax payer shall incur penalties in addition to paying the tax arrears.

- Personal belongings of foreign entities given diplomatic immunity according to regulations of law on diplomatic immunity.

- Hand luggage within the tax-free allowance of Vietnamese people and foreigners when passing through a Vietnam’s checkpoint.

- Imported goods for sale at tax-free shops as prescribed by law.