The Standing Committee of the National Assembly September 25 said that it will submit the amended Special Consumption Law to the National Assembly’s eighth session in October, proposing an increase in consumption tax on three commodities including tobacco, beer and alcoholic beverage.
The duties increase the price paid by the consumer, thereby discouraging the consumption or waste of the products concerned. The proposal will take effect from July 1, 2015.
In the proposal, consumption tax rate of tobacco will surge from 65 percent to 70 percent since the first day of 2016 and hike from 70 percent to 75 percent from January 1, 2019. This rate on beer will increase from 50 percent to 55 percent from July 1, 2015; from 55 percent to 60 percent from January 1, 2015 and up 65 percent from January 1, 2018.
Alcohol products with a proof content of 20 degrees will rise 50 percent special consumption tax rate. This new rate has been applied from the beginning of 2010 for alcoholic beverage with a proof content of 40 degrees. For alcohol products with a proof content of below 20 degrees, the new consumption tax rate will be 35 percent.
Currently, illegal import of tobacco is rampant and anti-smuggling mission is not effective badly influencing to domestic production. Accordingly, the new consumption tax rate is appropriate.
Vietnam is among the countries having the highest rates of male tobacco smokers in the world. According to the 2010 global adult tobacco survey, the proportion of smokers over 15 years old is 47.4 percent for male and 1.4 percent for female. The average rate is 23.8 percent or 15.3 million people.