Vietnam: Experts and industry leaders urging government to delay special consumption tax implementation until 2028
Amid growing concerns over economic challenges, experts and industry leaders are urging Vietnam’s government to delay the implementation of the special consumption tax (SCT) increase on alcoholic beverages until 2028 instead of 2026, VietNamNet reported on March 19.
The proposed postponement aims to ease financial pressure on businesses, sustain economic growth, and maintain revenue generation.
During a seminar on March 18, hosted by the Vietnam Chamber of Commerce and Industry (VCCI), stakeholders discussed revisions to the Special Consumption Tax Law before it is submitted for approval at the 9th session of the National Assembly.
According to Dr. Can Van Luc, chief economist at BIDV, businesses are already struggling due to global trade and technology conflicts, rising logistics costs, and uneven order recovery. A rapid increase in SCT could reduce consumer demand, investment, and overall industry benefits.
“A sharp and immediate increase in excise taxes on alcoholic beverages could disrupt tax contributions in the long run,” Luc warned. “It would add financial strain on businesses, their employees, and related sectors such as packaging, logistics, tourism, and hospitality.”
Luc suggested postponing the SCT hike until January 1, 2028, to allow businesses sufficient time to adapt.
Dr. Vo Tri Thanh, director of the Institute for Brand Strategy and Competitive Research, highlighted that excise taxes aim to regulate consumer behavior and protect public health. However, he warned that higher taxes might not reduce alcohol consumption but instead push consumers toward smuggled or illicit products.
“The effectiveness, fairness, and impact of the tax policy must be carefully studied before implementation,” Thanh emphasized.
At the seminar, business representatives echoed concerns about excessive taxation, arguing that recent economic challenges have already weakened demand for alcoholic beverages.
Nguyen Van Viet, chairman of the Vietnam Beer-Alcohol-Beverage Association (VBA), noted that alcohol sales have declined sharply since late 2024, particularly during the Tet holiday, as consumers cut back on discretionary spending.
“If taxes rise too quickly, it could hinder economic growth instead of stimulating it,” Viet explained. “We propose delaying the SCT increase until 2028 and implementing gradual adjustments under Option 1 to support industry development.”
Tran Ngoc Anh, senior external affairs director at Heineken Vietnam, warned that Vietnam's beer industry is facing a "double trap" - export challenges alongside stagnant domestic demand.
Anh cited Nielsen data showing that illicit beer sales surged by 71% in 2024, capturing 5.8% of the national market share, with the Mekong Delta region accounting for 8%. This tax evasion not only reduces state revenue but also poses health risks to consumers.
“The government should carefully consider a balanced tax roadmap to minimize negative impacts on economic growth, businesses, and consumers,” Anh urged. “We suggest implementing the first tax hike in 2027, under Option 1, to allow the industry time to adjust.”
Similarly, Nguyen Hoang Giang, a representative from Saigon Beer-Alcohol-Beverage Corporation (SABECO), advocated for postponing the SCT increase to 2028, warning that businesses need relief from compounding economic pressures.
From the European Chamber of Commerce in Vietnam (EuroCham), Huynh Thi Thanh Truc, head of the Wine and Spirits Subcommittee, called for a harmonized tax policy that balances government revenue targets, business sustainability, and public health protection.
The draft amendments to the Special Consumption Tax Law propose two scenarios for increasing taxes on beer and spirits:
Option 1: Raise the SCT from 65% to 70% in 2026, followed by 5% annual increases, reaching 90% by 2030.
Option 2: Raise the SCT from 65% to 80% in 2026, with 5% annual increases, reaching 100% by 2030.
21 March, 2025
