MoF proposes to revise Law on Excise Tax

Illustrative photo.

The development of the revised draft Law on Excise Tax is necessary

The MoF said that the Law on Excise Tax No. 27/2008/QH12 took effect from April 1, 2009, replaces the Law on Excise Tax 1999, Law amending and supplementing some articles of Law on Excise Tax 2003, the Law amending and supplementing many articles Law on Excise Tax and the Law on VAT 20005. In addition, the Law on Excise Tax 2008 was revised in 2004, 2016 and 2002 to handle shortcomings in reality and line with tax requirements in each period.

According to the MoF, the amendments to the Law on Excise Tax have positively affected aspects of socio-economy statuses, such as contributing to the orientation of social production and consumption, regulating the income of high-income consumers, redistributing income, ensuring social justice, protecting the environment, implementing Vietnam’s commitments upon joining the World Trade Organization (WTO), complying with international practices and stabilizing revenues for the State budget.

However, in the current period of socio-economic development and the near future, the excise tax policies still show certain shortcomings that should be revised to promote the role of the excise tax. For example, subjects to Excise Tax are still narrow compared to international practices; in some regulations, taxable subjects and non-taxable subjects, item descriptions in the Tariff are unclear, leading to shortcomings in reality.

In addition, the excise tax rates on some goods causing harm to health and society and some luxury goods are still low, which has not achieved the goal of restricting consumption or regulating the income of high-income users in society.

The MoF also said that there have no regulations on excise tax refunds for the excise tax amount that has not been fully deducted for items that should be encouraged to produce and consume eco-friendly products.

Therefore, the practical requirements need to revise the Law to resolve shortcomings and encourage the conversion of import, production and use of the eco-friendly product, and limit the use of products harmful to health.

Notably, international experience shows that the general trend of excise tax reform in many countries worldwide is to expand the tax base to limit the consumption of some types of goods harmful to health, or the State should regulate consumption, and supplement some new products and services to excise tax subjects.

The MoF said that from the theoretical, practical and international experience, the development of the draft Law on Excise Tax.

Supplementing regulations on applying excise tax for products that are not beneficial to health

The draft law aims to follow the Party and State’s policy on socio-economic development by 2030, developing green energy and reducing harmful gas emissions for health and the environment. In addition, it removes difficulties for production and business activities, reform administrative procedures and promotes resources for socio-economic development.

Towards expanding the tax base; restricting the import, production and consumption of products harmful to health and the environment; encouraging investment, production, import and use of environmentally friendly automobiles; amending obstacles in current regulations to ensure transparency and smooth implementation.

The MoF will consider supplementing the regulation on applying excise tax on products that are not beneficial to health such as sugary drinks; barley and non-alcoholic drinks; new cigarettes and equipment, parts and solutions of new cigarettes; online video game service business.

The MoF proposes to submit to the Government the progress of the revised draft law as follows: The Government proposes to develop the revised draft law and submits it to the National Assembly Standing Committee to report to the National Assembly. To approve the proposal for adding the revised draft law to the Law and Ordinance Development Program at the 6th session of the XV National Assembly (October 2023).

The Government submits it to the National Assembly for approval of the revised draft Law at the 7th session of the 15th National Assembly (May 2024).