HÀ NỘI — The Vietnam Chamber of Commerce and Industry (VCCI) held a consultation workshop on March 18 in Hà Nội to discuss and refine the draft Special Consumption Tax (SCT) law, warning that sudden increases could be counterproductive.The event gathered policymakers, industry associations, directly affected businesses, the business community and economic experts.Speaking at the workshop, the Chief Economist at the Bank for Investment and Development of Vietnam (BIDV) and Director of the BIDV Training and Research Institute, Cấn Văn Lực, noted that amid geopolitical tensions, trade and technology competition, and modest global growth forecasts for 2025-2026, businesses continue to face significant challenges.He warned that a sharp and sudden increase in SCT on alcoholic beverages could negatively impact long-term State budget contributions, creating multiple difficulties for businesses and workers in the industry, as well as related sectors such as packaging, transportation, tourism, and food services.Lực proposed that the draft SCT law should balance interests, responsibilities and feasibility for the State, businesses, consumers and farmers involved in raw material production, while ensuring job security for workers.Nguyễn Văn Việt, Chairman of the Vietnam Beer, Alcohol, and Beverage Association (VBA), highlighted that while Việt Nam’s total retail sales and consumer service revenue grew by 9 per cent in 2024 to VNĐ6.4 quadrillion (US$253.8 billion), the beverage industry experienced a downturn due to weak demand and tightened consumer spending, particularly during the Lunar New Year period.Việt pointed out that the draft SCT law proposes two scenarios for tax hikes on alcohol, with a stronger inclination toward Scenario 2. This would increase tax rates from 65 per cent to 80 per cent in 2026, followed by annual five per cent increments until 2030, reaching 100 per cent.For sugar-sweetened beverages, the draft law proposes adding beverages with more than 5g of sugar per 100ml to the SCT category, with a proposed tax rate of 10 per cent.General Director of Saigon Beer Trading One Member Limited Liability Company (SATRACO), speaking on behalf of Saigon Beer - Alcohol - Beverage Corporation (SABECO), Nguyễn Hoàng Giang, warned: "The entire beer industry, including SABECO, is facing multiple challenges, from the COVID-19 pandemic to Decree 100/168 and declining tourism and dining activities. These difficulties are expected to persist in the coming years."SABECO urged policymakers to postpone the implementation of the SCT hike to 2028 instead of 2026 and to adopt Scenario 1, which gradually increases taxes over five years, with annual five per cent increments.Director of the Institute for Brand and Competitive Strategy Research, Võ Trí Thành, argued that higher SCT rates on alcohol and tobacco do not necessarily change consumer behaviour, as consumers may switch to illicit products instead.Similarly, a member of the National Advisory Council for Financial and Monetary Policy, Cấn Văn Lực, pointed out that an across-the-board SCT increase on alcoholic beverages may not effectively target consumer behaviour.— VNS (ICE HO CHI MINH CITY)

Fonte notizia: Vietnam News