Updated  
April, 08 2014 08:00:00

Experts label 10% soft drink tax ‘unfair'

Customers shop at a soft-drink stall in Ha Noi's Big C Thang Long Supermarket. Carbonated soft drinks will be slapped with 10 per cent tax from July 2015 following a proposal released by the Ministry of Finance. — VNA/VNS Photo Tran Viet

HA NOI (VNS)— A 10 percent tax would be imposed on carbonated soft drinks under a revised draft of the special consumption tax law released by the Ministry of Finance last Friday, which would take effect in July 2015.

The ministry cited several studies that point out the potentially harmful effects of soft drinks on public health, suggesting that their consumption should be controlled in the same way as that of cigarettes and alcohol. However, some experts are vehemently opposed to the tax.

"These products are popular and consumed in almost all rural areas, so it would be bad for consumers," said Phan Huu Thang, Director of the Global Integration Business Consultants, who argued that the move would also hurt the sugar manufacturing industry, retail distribution system and individual businesses.

Herb Cochran, director of AmCham Viet Nam in HCM City, said the imposition of a special consumption tax on products such as non-alcoholic carbonated soft drinks was "unfair" for consumers.

Special consumption tax was applied only for luxury products, which served the needs of a small group of people with high income, and products that had a negative impact on the environment and people's health, he said.

Nguyen Thi Cuc, President of the Viet Nam Tax Consultancy Association, said Viet Nam should consider imposing such a tax, as many other countries have already done.

Tran Kim Chung, Deputy Director of the Central Institute for Economic Management, estimated that if the tax was imposed, the Government would collect US$8.4 million, the beverage industry would lose US$40.5 million, the country's economy would lose US$12 million and GDP growth could decrease by as much as 0.01 per cent.

Moreover, demand for non-alcoholic soft drinks would reduce by 28 per cent, he said.

"At the beginning, tax collecting might increase a bit, but gradually it will go down," Chung said. "On the flip side, labourers, jobs and suppliers of sugarcane and other materials will be negatively affected." — VNS


Send Us Your Comments:
Name:
Your E-mail address:
Title:
 

VietNamNews may edit your comments and not all emails will be published.

Highlight

Mountains of coal sludge still threat to lives in Quang Ninh Mountains of coal sludge still threat to lives in Quang Ninh

Wiping sweat from his forehead, 36-year-old Trinh Duc Sang took big strides along a road covered with muddy coal sludge and dirt to the place that was his home until just three weeks ago. He climbed a rickety ladder that buckled under his weight to reach his neigh-bour's house overlooking a creek. From there, he crossed into his old home.

Vietnam Airlines launches new-generation Airbus plane Vietnam Airlines launches new-generation Airbus plane

The national flagship carrier Vietnam Airlines held a ceremony on July 2 to receive its first Airbus 350-900 aircraft and announce its upgrade service quality programme and new brand identifying system, marking a major step in bringing the airline into the international arena.

Wounds begin to heal between US, Viet Nam 1    Wounds begin to heal between US, Viet Nam

Pham Ba Lu swore thousands of times that he "would not live under the same sky as the United States".

Mental disorders affect 10% of Viet Nam's population: MoLISA Mental disorders affect 10% of Viet Nam's population: MoLISA

Nearly 9 million people in Viet Nam, or 10 per cent of the population, suffer from mental disorders, including 2.5 per cent with serious mental illnesses under social protection.