What is the proposal for appropriate tax policy on goods that are harmful to health in Vietnam according to Decision 89?
What is the proposal for appropriate tax policy on goods that are harmful to health in Vietnam according to Decision 89?
According to Clause 1 Section 2 Decision 89/QD-TTg year 2024 for all citizens to benefit from quality healthcare services, live in a safe community, and develop well physically and mentally, contributing to improving the quality of life and the quality of human resources for the cause of building and defending the nation, the Prime Minister of the Government of Vietnam approved the National Strategy on protecting, caring, and improving the health of the people for the period up to 2030, with a vision towards 2045 (Article 1 Decision 89/QD-TTg year 2024).
According to Clause 9 Section 3 Decision 89/QD-TTg year 2024, it is stipulated:
III. MAJOR TASKS AND SOLUTIONS
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- Reforming healthcare financing and health insurance
a) Mobilizing financial resources
- Prioritize budgeting to ensure the growth rate of healthcare expenditure is higher than that of the state budget; allocate at least 30% of the healthcare budget for preventive healthcare work. Mobilize aid, sponsorships, and preferential loans domestically and internationally to invest in developing the healthcare system. Implement comprehensive solutions to achieve universal health insurance.
- Further research appropriate tax policies for goods that are harmful to health: alcoholic beverages, carbonated drinks, sugary beverages, cigarettes..., support people to participate in health insurance and support the payment of medical examination and treatment costs for the poor, cancer patients.
- Promote socialization; diversify public-private cooperation forms, ensure transparency, openness, and healthy competition to encourage private healthcare development.
b) Allocating financial resources
- Prioritize the allocation of the state budget to invest in primary healthcare, preventive healthcare, healthcare in difficult areas, medical research, psychiatry, and leprosy.
- Vigorously reform the financial mechanism for primary healthcare, prioritize the budget for healthcare for meritorious persons, the poor, farmers, ethnic minorities, migrants, and people in socio-economically challenging areas.
- Innovate the budget allocation method based on performance and practical conditions. Strengthen control and inspection of healthcare costs, ensuring transparency, fairness and protecting the lawful rights of health insurance participants.
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To reform healthcare financing and health insurance, the Prime Minister of the Government of Vietnam requires further research into appropriate tax policies for goods that are harmful to health: alcoholic beverages, carbonated drinks, sugary beverages, cigarettes..., support people to participate in health insurance and support the payment of medical examination and treatment costs for the poor, cancer patients.
What is the proposal for appropriate tax policy on goods that are harmful to health in Vietnam according to Decision 89? (Image from Internet)
What is the VAT rate for seasoned foods in Vietnam?
According to Clause 7 Article 10 Circular 219/2013/TT-BTC it is stipulated:
5% Tax Rate
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- Fresh food at commercial trade stages; unprocessed forestry products at commercial trade stages, excluding wood, bamboo shoots, and products specified in Clause 1 Article 4 of this Circular.
Fresh food includes items that have not been fully cooked or processed into other products, only preliminarily processed by cleaning, peeling, cutting, freezing, drying while retaining its fresh nature such as livestock meat, poultry meat, shrimp, crab, fish, and other seafood and aquatic products. In cases where marinated food is included, a 10% tax rate applies.
Unprocessed forestry products include products harvested from natural forests belonging to groups: rattan, bamboo, trees, nuts, mushrooms; roots, leaves, flowers, medicinal plants, tree sap and other forestry products.
Example 49: LLC A produces marinated fresh fish according to the process: fresh fish caught is filleted, then marinated with sugar, salt, sorbitol, packaged, and frozen, the item of marinated fresh fish does not fall under the 5% tax rate but falls within the 10% VAT rate.
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Accordingly, seasoned foods is subject to a value-added tax rate of 10%.
What is the VAT rate for functional foods in Vietnam?
According to Clause 1 Article 10 Circular 219/2013/TT-BTC (amended by Article 1 Circular 43/2021/TT-BTC) it is stipulated:
5% Tax Rate
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- Medical equipment and tools including machinery and medical tools: scanning, screening, and imaging machines used for medical examination and treatment; specialized equipment and tools for surgery, wound treatment, ambulances; blood pressure, heart, pulse measuring devices, blood transfusion equipment; syringes; contraceptive tools; medical tools and equipment with an import license or a circulation registration certificate or a receipt of declaration of standards according to the provisions of the health law or according to the list of specialized medical equipment managed by the Ministry of Health determined by the Vietnamese export, import commodity codes list attached to Circular No. 14/2018/TT-BYT dated May 15, 2018, of the Minister of Health and documents amending, supplementing (if any).
Cotton, bandages, medical gauze and sanitary pads; preventive and therapeutic drugs including finished drugs, raw materials for making drugs, except for functional foods; vaccines; medical biologicals, distilled water for preparing injectable drugs, infusion solutions; surgical caps, gowns, masks, drapes, gloves, specialized medical footwear coverings, skin fillers (excluding cosmetics); testing, disinfection chemical supplies used in healthcare.
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Meanwhile, according to Article 11 Circular 219/2013/TT-BTC, it is stipulated:
10% Tax Rate
The 10% tax rate applies to goods and services not specified in Articles 4, 9, and 10 of this Circular.
The VAT rates specified in Articles 10 and 11 apply uniformly to each type of goods and services at all stages of importation, production, processing, or commercial trade.
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Thus, functional foods are subject to a 10% tax rate.
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