According to the draft amendment to the Law on Special Consumption Tax, the Ministry of Finance has proposed a 10% excise tax on sugar-sweetened beverages containing more than 5g of sugar per 100ml, as per Vietnamese standards.

The ministry considers this a new item added to the taxable list, with the 10% rate aimed at encouraging manufacturers and importers to produce lower-sugar options and raising consumer awareness and behavior modification. This tax rate is projected to increase retail prices by 5%.

However, Hoang Thi Thu Huong from the Legal Department of the Ministry of Health argues that such an increase in retail prices is "insignificant and insufficient to impact consumer behavior.” For example, a drink currently priced at VND 10,000 per bottle would rise to VND 10,500 after the tax. Thus, the Ministry of Health suggests a 40% excise tax on sugary drinks (or 30% initially, rising to 40% over time).

This recommendation aligns with the World Health Organization (WHO) guidelines, which state that to reduce sugary drink consumption, retail prices need to increase by at least 20%, equating to a 40% tax on manufacturers' prices.

This approach not only helps reduce consumption and prevent obesity and the associated health impacts but also boosts state revenue, lowers healthcare costs related to these diseases, and reduces long-term productivity losses.

A 2022 study by the Hanoi University of Public Health indicated that a 20% excise tax on sugary drinks could reduce overweight and obesity rates by 2.1% and 1.5%, respectively, prevent 81,462 cases of type 2 diabetes, and save USD 24.55 million in healthcare costs. A joint study by HealthBridge Canada, WHO Vietnam, and other partners estimated that a 40% tax on manufacturer prices could yield approximately VND 17.4 billion in state revenue.

Consumption of sugary drinks in Vietnam has surged in recent years. Total consumption rose from 1.59 billion liters in 2009 to 6.67 billion liters in 2023—a 420% increase. Per capita consumption has also climbed and is expected to continue rising.

Assoc. Prof. Dr. Truong Tuyet Mai, Deputy Director of the National Institute of Nutrition, pointed out that unlike solid forms of sugar (e.g., in cakes, candies, chocolate), liquid sugar in beverages poses greater health risks.

Dr. Nguyen Tuan Lam, a WHO expert in Vietnam, highlighted that high consumption of sugary drinks—the most common type of sugar-sweetened beverage—is linked to overweight, obesity, and metabolic disorders in both adults and children. These contribute to increased rates of type 2 diabetes, hypertension, cardiovascular complications, stroke, and various other health issues, including gastrointestinal, dental, and bone conditions.

The reality is that overweight, obesity, and chronic diseases are rapidly rising in Vietnam. According to Assoc. Prof. Mai, 10 years ago, the obesity rate among children was 8.5%, but it has now reached 19%. For adults, the rate is nearly 20%.

Many countries have implemented excise taxes on sugary drinks. Over the past 15 years, the number of countries adopting this policy has grown from 35 (in 2009) to 104 (in 2023). In ASEAN, six countries - Thailand, the Philippines, Malaysia, Laos, Cambodia, and Brunei - have applied this tax.

In Thailand, after two years of implementing the excise tax, average daily per capita consumption of sugary drinks decreased by 2.8%, with carbonated drink consumption falling by 17.7%. In Mexico, sugary drink consumption dropped by 6% in the first year and by 10% in the second year.

Health experts, therefore, argue that now is the right time to include sugary drinks, particularly sugar-sweetened beverages, in the list of goods subject to excise tax.

Vo Thu