Vietnam parliament’s economic committee proposes delay to excise tax levy on sugary drinks

Vietnam should postpone the imposition of a 10% excise tax on sugary drinks by one or two years from the scheduled timeline, said Phan Van Mai, Chairman of the National Assembly’s Economic and Financial Committee.

Mai made this suggestion at a meeting of the National Assembly’s Standing Committee on Monday. The Ministry of Finance is currently working on the amended Excise Tax Law, which is set for a vote in May 2025.

“This approach still ensures law enforcement while providing greater flexibility, allowing businesses more time to adjust their production and business plans,” Mai emphasized.

Meanwhile, the Ministry of Finance insisted on its proposal to impose a 10% excise tax on sugary drinks as scheduled. The ministry argued that the tax would encourage businesses to produce low-sugar beverages and raise consumer awareness of the health risks associated with sugary drinks.

At an excise tax worshop in Hanoi last Friday, Prof. Nguyen Mai, chairman of the Vietnam’s Association of Foreign Invested Enterprises (VAFIE), recommended authorities not levy the tax on sugary drinks.

In case the National Assembly, the country's legislature, insists on passing the law with tax on sugary drinks, the tax should be phased out for businesses to adapt to the situation, Mai added.

He elaborated that in the first two years of the new amended law (2026-2027), sugary drinks should not be subject to excise tax. In the next three years (2028-2030), the excise tax should be 5% for all sugary drinks, regardless of their sugar ingredients. From 2031, a blanket excise tax of 10% is recommended.

Earlier, Nguyen Minh Thao, head of the business environment and competitiveness research department under the Central Institute for Economic Management (CIEM), warned that imposing an excise tax on sugary drinks would impact around 25 other sectors involved in the manufacturing and distribution supply chain of soft drinks.

A 10% excise tax on sugary drinks could erase 0.5 percentage points from Vietnam’s GDP, she added.