Vietnam. The changes of the tax base will result in increase of retail prices

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While Law on Special Consumption Tax (SCT) and the Regulation on increase in the excise tax prepare for consideration at the meeting of the National Assembly 13, the brewers are actively seeking to postpone the entry into force of these two documents.

The purpose of the bills is to increase the transparency of operations, to formalize the procedure of tax calculation and to reduce the likelihood of financial fraud by multi-level companies. However, the entrepreneurs insist that innovations will pose problems in the calculation of the tax base and lead to higher prices for final products.

According to the new law, the excise tax is not subject to the wholesale sales price to the distributor but the price which is close to that one at which the product is sold to the final buyer. That is, the basis for taxation is the price of the manufacturer, but not less than 7% of the average price that receives the latest trading company in the distribution chain.

Therefore, the government aims to make the pricing in huge companies like Sabeco and VBL more transparent, where due to the plurality of subsidiaries and distributors the final amount of the excise tax reduces.