Latest news with #LawonSpecialConsumptionTax
The Star
30-06-2025
- Business
- The Star
Vietnam rolls out key tax reforms starting July 1
Tourists ride three-wheel bicycle taxis, known as cyclos, in the old quarter of Hanoi - AFP HANOI: From July 1, Vietnam will officially enforce a new set of tax laws that are expected to reshape the country's tax system in both structure and administration. These changes follow the passing of several amended tax laws, including the revised Law on Value-added tax (VAT), Law on Corporate Income Tax, Law on Personal Income Tax, and Law on Special Consumption Tax. The updates are seen as a major reform to improve fairness, efficiency and transparency in taxation. Under the new rules, the VAT system will see major changes. One key highlight is the mandatory use of non-cash payments for VAT input deduction. This applies even to purchases under 20 million dong. In the past, only payments over that threshold required bank transfers. Now, businesses must show non-cash payment proof for all purchases to claim VAT credit. This aims to prevent fake invoices and strengthen tax integrity. It may pose challenges at first for small vendors and traditional market sellers. But in the long run, non-cash payments will help them build a clear financial history, which makes it easier to access official credit. — Viet Nam News/ANN
The Star
30-06-2025
- Business
- The Star
Vietnam rolls out key tax reforms from July 1 to support fairer system
HANOI: From July 1, Vietnam will officially enforce a new set of tax laws that are expected to reshape the country's tax system in both structure and administration. These changes follow the passing of several amended tax laws, including the revised Law on Value-Added Tax (VAT), Law on Corporate Income Tax, Law on Personal Income Tax and Law on Special Consumption Tax. The updates are seen as a major reform to improve fairness, efficiency and transparency in taxation. Under the new rules, the VAT system will see major changes. One key highlight is the mandatory use of non-cash payments for VAT input deduction. This applies even to purchases under VND20 million (roughly US$770). In the past, only payments over that threshold required bank transfers. Now, businesses must show non-cash payment proof for all purchases to claim VAT credit. This aims to prevent fake invoices and strengthen tax integrity. It may pose challenges at first for small vendors and traditional market sellers. But in the long run, non-cash payments will help them build a clear financial history, which makes it easier to access official credit. The revised VAT Law also doubles the taxable income threshold for household and individual businesses. From 2026, only those earning over VND200 million per year will be subject to VAT and personal income tax. This is a strong support measure for micro businesses, easing their tax burden and paperwork. It gives them more room to reinvest and grow. At the same time, the law updates the list of non-taxable goods and services. It adjusts taxable prices for imported goods and revises tax rates for several product groups. These changes are made to better reflect the real economic value and encourage the right consumption behaviour in society. VAT exemptions are applied for several items — including fertilisers, agricultural machinery, offshore fishing vessels, securities custody and stock market operation services. Exports made from processed natural resources or minerals will only be VAT-exempt if listed by the Government. The law also introduces VAT exemption for imported goods donated for disaster relief, epidemic control or war-related support. In addition, the method for calculating VAT on imported goods has been revised. The new formula bases VAT on the customs value plus applicable import duties, any additional import-related taxes, special consumption tax and environmental protection tax — if any. One important area of focus is e-commerce. Authorities will now apply a 'tax withholding at source' mechanism. From July 1, e-commerce platforms like Shopee, Lazada and Tiki must withhold taxes before transferring payments to sellers. The tax is calculated as a percentage of the revenue from each transaction. For example, VAT is applied at one per cent for goods, five per cent for services and three per cent for transportation or services tied to goods. Personal income tax for local sellers is 0.5 per cent for goods, two per cent for services and 1.5 per cent for transportation. For foreign sellers, the corresponding rates are one per cent, five per cent and two per cent. If a platform cannot identify whether a sale is a good or a service, the highest rate applies. Monthly tax filing is required. Cancelled or refunded orders must be adjusted. This ensures proper and timely tax collection. It also creates fairness between online and offline sellers, since traditional shops have long been required to follow full tax rules. A major shift in personal tax management is also being introduced. From July 1, personal tax codes will be replaced by 12-digit personal ID numbers. These IDs, found on every citizen's national ID card, will be used for all tax filings, payments and refunds. By linking tax records with population data, social insurance, land use and banking information, authorities will be able to use big data to detect tax risks and trace fraud more effectively. However, tax officials have also clarified a key concern from the public: not every transfer into a personal bank account will be taxed. Many people have worried that all incoming funds — like wedding gifts, birthday money or family support — could be subject to tax audits. But the tax department confirmed this is a misunderstanding. Under current rules, many kinds of income are exempt from personal income tax. These include gifts between close relatives, inheritance, one-time property sales, income from savings or insurance, and compensation payments. Transfers related to agriculture or fishing are also usually tax-free. Still, taxpayers are encouraged to keep records of their transactions, especially when large amounts are involved. Having documents can help prove the nature of a transfer if questions arise later. Officials also said that they do not monitor all bank transfers. Checks are only made when there are signs of tax evasion, especially when people receive large sums but do not issue invoices or report income. The case of social media influencer 'Cun Bong' (real name Vu Nam Phuong) is one such example. She reported VND5 billion in income from 2023 until now, but authorities discovered her actual revenue was over VND120 billion. She is now under criminal investigation for serious accounting violations and tax evasion. This case is a warning to all influencers and online sellers to follow the law. - Bizhub/Vietnam News/ANN
The Star
14-06-2025
- Business
- The Star
Not so sweet move - Vietnam approves sugary drinks tax under amended consumption law
HANOI (Xinhua): Vietnam's National Assembly on Saturday passed the amended Law on Special Consumption Tax, approving for the first time an excise tax on sugary drinks, the Vietnam News Agency reported. Under the revised law, drinks containing more than 5 grams of sugar per 100 ml will be taxed at 0 per cent in 2026, 8 per cent from January 2027, and 10 per cent starting in 2028. According to the report, milk, 100 per cent fruit juice, coconut water, liquid nutritional supplements, mineral water, and nectar drinks will be exempt from the tax. The law, effective from Jan. 1, 2026, also expands taxation to air conditioners within certain capacity ranges, while maintaining current tax rates on products like alcohol, tobacco, vehicles, and entertainment services, the report added. During the National Assembly's meeting, delegates also proposed new taxable items such as online games, cosmetic services, and plastic packaging, pending further discussion. - Xinhua
The Star
04-06-2025
- Business
- The Star
Health Ministry urges sugary drink tax as consumption soars in Vietnam
HANOI: The Ministry of Health (MoH) has raised concerns over the sharp rise in sugary drink consumption in Vietnam, warning that failure to impose a special consumption tax could come at the cost of public health. In 2023, the average Vietnamese consumed around 66 litres of sugary beverages, equivalent to 18g of sugar per day, or 36 per cent of the World Health Organization (WHO)'s maximum recommended intake for adults. Between 2009 and 2023, sugary drink consumption quadrupled, nearly doubling in the past decade alone. Per capita consumption surged by 350 per cent, from 18.5 to 66.5 litres per year. A 2019 national survey found that nearly 34 per cent of students aged 13–17 drank carbonated beverages at least once a day. The WHO estimates that without stronger controls, sugary drink consumption in Việt Nam could rise by an average of 6.4 per cent annually through 2028, fuelling higher rates of obesity, diabetes and heart disease. The MoH says that taxing sugary beverages is one of the most effective and low-cost interventions to reduce sugar consumption and prevent non-communicable diseases. The WHO recommends a tax that raises retail prices by at least 20 per cent. According to research by the Hanoi University of Public Health, such a tax in Việt Nam could reduce rates of people who are overweight or obese by 2.1 per cent and 1.5 per cent respectively, prevent 80,000 diabetes cases and save nearly VNĐ800 billion (US$30.77 million) in healthcare costs. At a National Assembly session debating amendments to the Law on Special Consumption Tax, Finance Minister Nguyen Van Thang said WHO data showed Vietnam was among the countries with the fastest-growing sugary drink consumption. 'Most of the sugar we consume comes from these beverages, driving obesity. WHO recommends a minimum 20 per cent tax. Frankly, we should have acted sooner,' he said. Delegate Le Hoang Anh from Gia Lai Province rejected the proposed 8–10 per cent tax from 2027 as too slow and too weak, arguing it fails to align with the national priority of putting health first. He pointed to countries like Thailand, which introduced a sugary drink tax in 2017, and the Philippines and Malaysia, which now collect billions of dollars annually from similar levies. 'If we don't act today, we will pay tomorrow, in lives lost, higher medical costs and reduced productivity,' he warned. Anh recommended adopting a 10 per cent tax starting in 2026, rising to 20 per cent by 2030, along with an absolute tax based on sugar content, like Thailand's. At least 108 countries have already imposed a special consumption tax on sugary drinks, including six in South-East Asia: Thailand, Malaysia, the Philippines, Brunei, Cambodia and Laos. The MoH says this demonstrates that such a tax is feasible and necessary for developing countries like Vietnam. Since 2017, Thailand has imposed a tiered excise tax on sugar-sweetened beverages based on their sugar content, rather than a flat percentage. The higher the sugar content, the higher the tax, reaching up to 5 baht ($0.15) per litre for drinks with more than 14 grammes of sugar per 100ml. On top of this, a 14 per cent value-added tax is also applied to the ex-factory price. The tax increases retail prices by approximately 11 to 20 per cent, encouraging manufacturers to reduce sugar content and helping curb sugar-related health risks. In the Philippines, the excise tax on sugar-sweetened beverages has been in effect since 2018. It imposes a specific excise tax on sugar-sweetened beverages, charging 6 pesos ($0.10) per litre for drinks sweetened with sugar or non-caloric sweeteners and 12 pesos per litre for those containing high-fructose corn syrup. This tax has effectively raised retail prices by about 16 to 20 per cent, aiming to curb consumption and tackle health issues like obesity and diabetes. — Vietnam News/ANN
