Vietnam: Propose excise tax on soft drinks, barley and non-alcoholic drinks?
Who are the excise payers under current regulations?
Pursuant to Article 4 of the 2008 Law on Excise Duty in Vietnam stipulating:
Taxpayers
Excise taxpayers include producers and importers of goods and providers of services which are subject to excise tax.
Exporters that purchase excise tax-liable goods from producers for export and do not export but sell them domestically shall pay excise tax.
Thus, the following entities must pay excise tax, including:
- Excise taxpayers include producers and importers of goods and providers of services which are subject to excise tax.
- Exporters that purchase excise tax-liable goods from producers for export and do not export but sell them domestically shall pay excise tax.
Vietnam: Propose excise tax on soft drinks, barley and non-alcoholic drinks?
Who is subject to excise tax under current regulations?
Pursuant to Article 2 of the 2008 Law on Excise Duty in Vietnam (amended by Clause 1, Article 1 of the 2014 Law on Amendments to some articles of the Law on Excise Duty) stipulating the following entities subject to excise tax:
- Goods:
+ Cigarettes, cigars and other tobacco preparations used for smoking, inhaling, chewing, sniffing or keeping in mouth;
+ Liquor;
+ Beer;
+ Under-24 seat cars, including cars for both passenger and cargo transportation with two or more rows of seats and fixed partitions between passenger holds and cargo holds;
+ Two- and three-wheeled motorcycles of a cylinder capacity of over 125 cm3;
+ Aircraft and yachts;
+ Gasoline;
+ Air-conditioners of 90,000 BTU or less;
+ Playing cards;
+ Votive gilt papers and votive objects.
- Services:
+ Dance halls:
+ Massage parlors and karaoke bars;
+ Casinos; prize-winning video games, including jackpot and slot games and games on similar machines;
+ Betting;
+ Golf business, including the sale of membership cards and golf playing tickets;
+ Lottery business.
Propose excise tax on soft drinks, barley and non-alcoholic drinks?
In the Report on the proposal to develop the Law on Amendments to some articles of the Law on Excise Duty, the Ministry of Finance proposed to supplement and impose excise tax on products that are not beneficial to health, the environment and services with limited use according to the guidelines of the Party and State such as sugary drinks; barley and non-alcoholic beverages; new cigarettes and equipment, parts and solutions of new cigarettes; business online video game services (online games), etc.
As for barley drinks and non-alcoholic beverages, the Ministry of Finance said that non-alcoholic beverages are produced according to the same production process and production materials as beer (after the fermentation process, the alcohol is separated from the product and natural flavors are added).
The product does not contain alcohol, so it is not identified as beer under the Law on Prevention of Harmful Effects of Alcohol, the product meets the beverage standard, so the enterprise announced the name and product standard as a barley drink, so it is not subject to excise tax.
However, according to the Ministry of Finance, barley drink products have the same production process and ingredients as beer, the appearance of the product is the same as that of beer, the same flavor as beer, only the name is different, and the price is approximately the same. The product can be considered similar to non-alcoholic beer. Therefore, it is necessary to have clear regulations to orient consumption for this item.
View the entire proposal for the development of the project of the Law on Amendments to some articles of the Law on Excise Duty: Click here.
What is the current excise tax calculation?
Pursuant to Article 5 of the 2008 Law on Excise Duty in Vietnam stipulating as follows:
Tax bases
Excise tax bases include the taxed price of a taxable goods or service and the tax rate. The payable excise tax amount is the excise taxed price multiplied by the excise tax rate.
According to that, the current excise tax calculation method will be determined according to the following formula:
Excise tax amount = excise taxed price x excise tax rate
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