Việt Nam considers imposing luxury tax on soft drinks

As Việt Nam continues to levy a special 25-50 percent tax on beer and alcohol, the Việt Nam Beer, Alcohol and Beverage Association (VBA) recently proposed that the state administration impose a similar 10 percent tax on carbonated beverages.

In a proposal sent to the National Assembly, Việt Nam’s legislature, and the Ministry of Industry and Trade and the Ministry of Finance, VBA called such tax “rational,” adding that it is “applied by many countries,” Tuổi Trẻ (Youth) newspaper reported Tuesday (July 9).

Carbonated beverages contain a level of acidity that is 100,000 times higher than normal water, which can lead to obesity, the paper cited a VBA’s document distributed at one of its seminars as saying.

A woman drinks a bottle of Coke on a Hà Nội street

According to the document, the reaction of the drinks’ saturated carbon dioxide (CO2) with acid in the body creates pressure on the stomach and intestines; and even is especially harmful to those who suffer from ulcers.

In its proposal, VBA also proposed that the relevant authorities cease allowing companies that continually post losses to start new investments or expand current ventures.

It claimed that companies like Coca-Cola Việt Nam have dispersed their profits abroad and falsified reported earnings to evade corporate income taxes.

The standard corporate income tax in Việt Nam is 25 percent.

Last June, the National Assembly also passed an amended version of the corporate income tax law that will slash corporate income taxes to 22 percent starting next year and 20 percent in 2016.

The new rate of 20 percent, however, was applied at the beginning of July for companies with total revenues of VND20 billion (US$941,400) or less.

Source: Thanh Niên News

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