Opposition to tax on sweet drinks

The special consumption tax proposal for sweet drinks is a part of a ministry proposal to revise five tax laws, including a value-added tax (VAT), special consumption tax, corporate income tax, personal income tax, and natural resources protection tax. In August last year, the ministry issued a proposal to place excise tax on sweetened beverages. This time, the authority announced that the excise tax rate would be 10% – in addition to 12% VAT. This would mean that all sweetened beverages, regardless of whether they are soft drinks, tea, coffee or energy drinks, will be subject to the excise tax. However, dairy products will be excluded. The ministry’s first proposal three years ago set the excise tax at 10% only on carbonated drinks. It said the adult obesity rate in Vietnam affected 25% of the population. For children under five years of age, the obesity rate had increased rapidly from 0.6% in 2000 to 5.3% in 2015, while the rate in HCM City had increased to 10.8% – and 12% in the downtown area. This means that the obesity rate in Vietnam is higher than the average rate in the Asian region and developing countries (the current global obesity rate is at 6.9%). Meanwhile, based on information from the World Health Organisation (WHO), sweetened beverages are said to have a negative impact on health. To restrict the use of sweetened beverages, 40 countries have already imposed special taxes on them. The ministry said obesity rates among children under five years… [Read full story]

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