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Beer brewers call for SCT changes

Released at: 14:01, 17/03/2016

Beer brewers call for SCT changes

Increase in special consumption tax on beer creating issues for the industry.

by Minh Tuyet

Mr. Pham Tuan Khai, former Director of the Legal Department at the Office of the Government, told a conference held by the Ministry of Industry and Trade on March 16 discussing the implementation of Decree No. 108/2015 and Circular No. 195 that he identified certain problems in the Decree after it was introduced on October 10, 2015.

The Ministry of Finance’s Decree No. 108/2015 and Circular No. 195, which guide the implementation of the 2008 and 2014 Laws on Special Consumption Tax, stipulate a 5 per cent increase in tax rates on beer and brandy annually until 2019, on wine every two years, and on cigarettes every three years.

The two legal documents were introduced in late 2015 and came into effect quite quickly, on January 1, 2016, creating difficulties in tax calculations.

Mr. Nguyen Van Viet, Chairman of the Vietnam Beer, Alcohol and Beverage Association (VBA), said that the two legal documents caused tax hikes and also problems in implementation.

Mr. Le Van Cuong, a senior financial expert, said that the problems stem from the decree and the circular ordering production companies to control the retail price of sales agents that are scattered throughout the country and independent from production companies. “This is unreasonable,” he emphasized.

Mr. Viet added that beer production in Vietnam is declining and tax rates in Vietnam are higher than those in neighboring countries like Laos and China.

Other participants at the conference also asked the State to ensure tax collections and the continued implementation of the Decree and the Circular so that enterprises will be unable to find any loopholes to conduct transfer pricing.

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