Sweet tooth: A customer visits the Cau Go market in Hanoi. The plan to introduce an excise tax on sugary beverages has been met with resistance, with experts suggesting it does not solely cause obesity but also depends on their diets and lifestyles. — Bloomberg
HANOI: Enterprises call for careful consideration to be given to the Ministry of Finance’s proposal to impose a special consumption tax on sugary drinks to ensure a harmonisation of benefits between the state, consumers and producers.
Nguyen Quoc Viet, deputy director of the Vietnam Institute for Economic and Policy Research, said production and business remain difficult.
To ensure macroeconomic stability, it is necessary to maintain policies that energise enterprises and promote domestic consumption, Viet said.
“Policy changes, if any, should be studied carefully to ensure benefit harmonisation.”
Viet added that it was not a good time to change taxes as it might further burden enterprises and consumers, especially when efforts are being made to recover growth.
He said that the adjustments might cause instability in the institutional and legal environment and have negative impacts on businesses.
The finance ministry plans to levy an excise tax on sugary, barley and non-alcoholic beverages. The ministry said that the tax was designed to bring down sugar consumption and improve public health, adding that the heavy consumption of these drinks was causing overweight and obesity among the population.
The ministry cited statistics showing that sugary drink consumption increased seven times in the last 18 years, from 6.6 litres per capita per year in 2002 to 52.09 litres in 2020.
Nguyen Thi Lam, former deputy director of the National Institution of Nutrition, said there was no clear link between sugary drink consumption and obesity.
She pointed out several reasons for obesity, such as a sedentary lifestyle, consuming foods rich in fat and protein, fast foods and sugar-containing foods.
According to Chris Valoon, president of the American Chamber of Commerce in Vietnam, Da Nang, the existing legal system of Vietnam does not define what a sugary drink is, despite the ministry’s proposal to add sugary drinks, barley drinks and non-alcoholic beverages to the special consumption tax.
This would mean that a wide range of products essential for life and health, such as milk and dairy, would be subject to the tax.
The impacts of the policy change must be carefully studied, especially on enterprises and consumers.
Sharing the same viewpoint, Tran Quang Trung, president of the Vietnam Dairy Association, said that it was not correct to consider sugar a major cause of overweight and obesity.
Besides the increasing rate of obesity in cities, the rate of stunted children in rural areas also needed to be paid attention to, he said, adding that it was necessary to have definitions for sugary drinks and classifications.
Do Thai Vuong of the Vietnam Beer, Alcohol and Beverage Association said that the beverage industry was recovering from the Covid-19 pandemic but still faced a lot of difficulties with uncertainties from the global situation and increasing production costs.
Enterprises in the beverage industry needed stable policies in terms of taxes and fees to return to pre-pandemic growth, he said.
The imposition of an excise tax on sugary drinks would not solve the problem of obesity but create a discriminatory tax policy, which might have undesirable consequences for other related industries such as sugar production, retail and packaging industries, he added.
Dinh Trong Thinh from the Academy of Finance, however, had a different perspective, saying that this tax should be levied to regulate consumption behaviour. — Viet Nam News/ANN
