Online games get special tax break

Customers play online games at an Internet cafe. The lastest draft of the amended law on special consumption tax has apparently excluded online games from the list of goods and services to be taxed. - VNS Photo Viet Thanh

The draft proposal has been submitted to the Eighth Session of the 13th National Assembly for discussion.

At a meeting held a month ago, several members of the National Assembly Standing Committee proposed that the tax be imposed on online games to deter the violence seen in some of the games, which are believed to have a negative impact on the impressionable youth.

But the law drafting committee argued that a tax on online games might harm domestic game producers, who were locked in fierce competition with their foreign counterparts.

The tax rates on 11 of 16 groups of products and services currently subjected to special consumption tax remained appropriate to reality, according to the committee.

The tax rates on five groups of products and services, including alcohol, beer, tobacco, biofuel and the casino business, will be reviewed during the session.

Specifically, the draft law increases the special consumption tax on tobacco from 65 to 70 per cent beginning January 1, 2016, and from 70 to 75 per cent beginning January 1, 2019.

It also increases the tax on beer from 50 to 55 per cent beginning July 1, 2015; from 55 to 60 per cent beginning January 1, 2017; and from 60 to 65 per cent beginning January 1, 2018.

It will also raise the tax on liquor with 20 per cent alcohol or more from 50 to 65 per cent, and that on liquor with less than 20 per cent alcohol from 25 to 35 per cent.

The Government also proposed incentive tax rates of nine per cent on biofuel E5 and 8.5 per cent on biofuel E10, to encourage the use of environment-friendly fuel.

Abolition of the income tax on prizes that individuals have won in games or bets has been proposed. Instead, the special consumption tax on games or bets will be increased from 30 to 35 per cent.