Health ministry proposes excise tax on sweetened drinks

At a Thursday meeting on the impacts of sweetened drinks on health, Tran Thi Trang, deputy head of the legislation department under the Ministry of Health, said the ministry is proposing to apply excise tax based on the amount of sugar contained within 100 ml of the drinks.

The proposal was made as the Ministry of Finance was building a draft law on excise tax for sweetened drinks.

Trang said there should be sugar thresholds to determine the amount of taxes to be applied, with a higher level of sugar resulting in more taxes. Drinks with a sugar level below a certain threshold would not need to be imposed such a tax, she suggested.

However, the health ministry has yet to provide exact sugar level thresholds for this policy.

The ministry said certain food products with low levels of sugar, such as milk and dairy products, would not be applied excise tax.

In accordance with WHO definitions, sweetened drinks are those that contain added sugar, such as sweetened soda water, bottled juices and energy drinks.

The WHO also recommends taxation on sweetened drinks as an important policy to reduce consumption, preventing obesity among the population.

Over the last decade, consumption rate of sweetened drinks in Vietnam has been growing rapidly. The health ministry expects a 3-5% growth in consumption of these drinks in the next five years.

Trang said alcoholic drinks with added sugar in the form of juice (ciders) have recently appeared in Vietnam and are well-liked by the general populace. She is worried that similar drinks would drive up sugar consumption among the population.

“Taxation and pricing are strong measures, along with advertisement control, to reduce the availability of a product,” she said.

Do Xuan Tuyen, deputy health minister, requested for a list of healthy products so that children would know not to consume too much processed food and sweetened drinks.

Vietnam has around 1,800 beverage-making facilities, directly providing jobs for over 300,000 workers and indirectly for millions of others, according to the Ministry of Industry and Trade. Therefore, a tax on sweetened drinks should be done in balance to ensure the interests of both the nation, society and businesses, it said.

Several beverage businesses have proposed to postpone excise taxes on beverages and for there to be no excise tax on sweetened drinks, citing the need for recovery after Covid-19 and the fact that there was no definition on what makes a “sweetened drink.”