To develop a roadmap to increase excise taxes on cigarettes, beer, and alcohol

To develop a roadmap to increase excise taxes on cigarettes, beer, and alcohol (Internet image)

On November 22, 2022, the Minister of Finance issued Decision 2438/QD-BTC approving the Action Program to implement the Tax System Reform Strategy until 2030.

To develop a roadmap to increase excise taxes on cigarettes, beer, and alcohol in Vietnam

According to Decision 2438/QD-BTC, the content of the excise tax policy reform is as follows:

- Develop a roadmap to adjust tax increases for tobacco, beer, and alcohol products to limit production and consumption and implement international commitments;

- Review, research, amend, and supplement subjects subject to a excise tax to regulate consumption in accordance with shifts in consumption trends in society as well as the Party and State's orientation on protecting people's health and the environment;

- Review to adjust excise tax rates on some products to suit the socio-economic conditions of the 10 years 2021-2030;

- Research and apply a combination of proportional tax rates and absolute tax rates to a number of goods and services subject to a excise tax.

Currently, according to the provisions of Article 7 of the Law on excise Tax 2008 (amended in 2014), the excise tax rate applied to cigarettes is 75%; alcohol is 35–65%; and beer is 65%.

Tax policy reform for some other taxes in Vietnam

In addition, Decision 2438/QD-BTC also provides tax policy reform for a number of other taxes, for example:

* For value added tax

- Expand the tax base by reducing the group of goods and services not subject to value-added tax and the group of goods and services subject to the 5% tax rate; move towards basically applying one tax rate;

- Research to increase value-added tax rates according to the roadmap;

- Research and uniformly apply the tax calculation method based on a percentage of revenue for taxpayers with revenue below the threshold or not eligible to apply the deduction method;

- Research to amend and supplement regulations on tax deduction and value-added tax refund in a simple, transparent, and consistent manner with relevant legal provisions.

* For corporate income tax

- Review to amend or abolish tax exemption and tax reduction incentives that are no longer consistent with development requirements and international integration requirements;

- Implement corporate income tax incentives for small and micro enterprises, and at the same time, shift the focus of policies to attract foreign investment from quantity to quality, encouraging the participation of all economic sectors in investing in key industries, occupations, and areas that need investment encouragement.

* For personal income tax

- Additional review of taxable objects;

- Research amendments and supplements in the direction of adjusting the amount and tax rates in accordance with taxable income in accordance with the nature of each type of income, creating simple conditions in personal income tax finalization for both taxpayers and tax authorities, and preventing tax evasion and avoidance.

More details can be found in Decision 2438/QD-BTC taking effect on November 22, 2022.

Van Trong

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