The Vietnam Chamber of Commerce and Industry (VCCI) has just sent a dispatch to the National Assembly's Economic and Financial Committee to contribute opinions to the draft revised Law on Special Consumption Tax.

VCCI believes that in the current challenging economic context, adjusting tax policies, especially special consumption tax, needs to be considered carefully and comprehensively.

Citing data from the General Statistics Office, VCCI said the number of businesses withdrawing from the market in 2024 increased by 14.7% compared to 2023, reaching a record 197,900 businesses. It is forecasted that in 2025, the global economy will continue to develop complicatedly, with many potential risks, while businesses in many fields are facing a continuous decline in purchasing power and increasing input costs.

VCCI proposes to postpone the increase in special consumption tax until 2028.

A rapid increase in tariffs would put enormous pressure on businesses and the entire supply chain. Businesses would have little time to adjust their business strategies, invest in new production technologies or improve product quality.

This could lead to a reduction in production scale, losses and even bankruptcy, directly affecting the jobs of millions of workers in related industries, from production, processing to distribution and export.

On the other hand, the target of GDP growth rate in 2025 is 8% or more and Vietnam is aiming for double-digit growth in the coming years. In particular, investment and consumption are two key factors that have a direct impact on economic growth rate. Sudden adjustment of special consumption tax rates can reduce purchasing power, negatively affecting the production and business activities of enterprises and the overall development of the economy.

“Although in the short term, budget revenue may increase, in the medium and long term, the decline in legal output along with the increase in the informal market will seriously affect state revenue,” VCCI assessed.

In addition, VCCI also believes that there is no clear evidence that a sharp increase in special consumption tax will significantly reduce consumer behavior. Instead, consumers may switch to unofficial products, or cut spending in other areas to maintain current consumption levels. Therefore, the goal of protecting public health may not be achieved as desired.

Therefore, VCCI recommends that tax increases and additional items subject to special consumption tax should not be considered at this time to avoid adverse impacts on the market and the business community. Instead, they should be considered more carefully, based on comprehensive, flexible, effective and practical impact assessment studies.

Accordingly, VCCI proposed that the tax increase roadmap could be considered from 2028, with a reasonable increase of 5% every two years, to help businesses have time to adapt, ensure the feasibility of the policy and limit negative impacts on the market.

Specifically, for alcohol and beer products, there needs to be a reasonable tax increase roadmap, extending the application period from 2028, with an increase of 5% every two years.

For beer: from 1/1/2028 – 12/31/2029: 70%; 1/1/2030 – 12/31/2031: 75%; and from 1/1/2032 onwards: 80%.

For alcohol from 20 degrees or more: 1/1/2028 – 12/31/2029: 70%; 1/1/2030 – 12/31/2031: 75%; and from 1/1/2032 onwards: 80%.

For alcohol under 20 degrees: 1/1/2028 – 12/31/2029: 40%; 1/1/2030 – 12/31/2031: 45%; and from 1/1/2032 onwards: 50%.

Regarding sugary soft drinks, VCCI recommends considering not including sugary soft drinks in the list of subjects subject to special consumption tax at this time to have more time to research, make comprehensive assessments and develop more appropriate policies.

For double-cabin pickup trucks, VCCI proposed to maintain the current special consumption tax rate to ensure market stability, support businesses and maintain state budget revenue.

For cigarettes, VCCI proposed a more reasonable adjustment roadmap. The absolute tax rate will start at VND2,000/pack in 2026, then increase by VND2,000/pack every two years, with a maximum of VND6,000/pack in 2030.