Increase excise tax to avoid shocking businesses.

According to Ms. Nguyen Thi Cuc, President of the Vietnam Tax Consulting Association (VTCA), adjusting and increasing the tax rates on alcoholic beverages in the near future is necessary and in line with the Party and State's policy. However, it is necessary to aim for a special consumption tax policy that harmonizes objectives and is appropriate to the specific context.

Continuously increasing excise taxes may not be as effective as intended. While tax increases may raise prices and potentially limit alcohol production, they may not necessarily achieve the goal of reducing alcohol consumption. This is because high tax increases could lead to increased smuggling, and higher-income consumers might turn to smuggled alcohol.

Rural consumers with low incomes are more likely to switch to a self-sufficient, self-sufficient system of selling for profit by brewing and mixing their own alcohol, avoiding excise tax , and failing to ensure product quality, thus affecting public health.

Therefore, the goal of limiting consumption and ensuring public health is difficult to achieve. Further careful consideration should be given to the impact of the rapid and high tax increase under the draft law on the market, production and business activities, consumers, and public health. Consideration should also be given to a phased approach to extend the tax rate increase to allow businesses time to develop plans and adapt their production and business operations without causing excessive disruption.

"For example, if the tax rate increases by 5% in the first year, the tax rate will increase gradually over several years in subsequent years instead of just one year. With a reasonable policy, the objectives of the special consumption tax will be more harmonized, the tax increase will not be too sudden, and there will be a roadmap to give businesses time to adapt, without significantly impacting manufacturing, trading, and food service businesses, the market, and workers in this interconnected supply chain," Ms. Cúc analyzed.

Associate Professor Ngo Tri Long, an economic expert, believes that the principle of taxation is to ensure a balance and harmony of interests between the State and taxpayers.

According to experts, this important principle ensures revenue for the state budget but does not allow taxpayers to fall into dire straits. Implementing this principle will prevent the state from creating tax shocks for businesses, society, and workers. If the total amount of taxes payable is too large, the lives of working people will not be guaranteed; the economy will be indirectly stagnant; and the risk of tax evasion is very high…

With the excessively high increase rates and the continuous annual tax hikes proposed by the Ministry of Finance, the current proposals will inevitably lead to a significant decline in production, resulting in tax revenue losses for the government. Therefore, careful consideration is needed before raising taxes in the current economic context of Vietnam to avoid shocking businesses while still ensuring state budget revenue.

Sharing this view, expert Bui Thi Viet Lam, Country Representative of the US-Vietnam Business Council, also believes that careful consideration is needed regarding high tax increases that could shock the market, seriously affect businesses, the economy, and society, and risk increasing the number of illegal products.