Ministry mulls over sin tax on soft drinks

February 25, 2014 | 09:30

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The Ministry of Finance is considering a special consumption tax on soft drinks for their potential health risks.

According to the ministry, several researches have pointed out the harm soft drinks could potentially pose to public health, suggesting that they should be controlled in the same way as cigarettes and alcohol.

The ministry cites the bad effects of preservatives, high sugar content, and other additives found in many such beverages, saying that higher taxes would dissuade their consumption.

They use the UK, France and Denmark as examples of countries which have applied special consumption taxes on soft drinks. In Asia, Thailand, Laos and Cambodia also have levied extra sales tax on non-alcoholic beverages. As a side note, the ministry stated that a 10% tax would add VND1.5 trillion (USD72 million) to the state budget by 2016.

However, the issue of soft drink consumption does not appear to be an open and shut case. According to an article written by Rob Preece in the World Customs Journal, most of the current taxes on soft drinks tend to disproportionately effect lower income earners.

Many experts have voiced the opinion that more study should be done on the economic and health effects of such a tax before any decision is made.

VietnamNet, dtinews

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