Officially Imposes Special Consumption Tax on Sugary Beverages
On June 14, 2025, Vietnam’s National Assembly passed the amended Special Consumption Tax Law, introducing a special consumption tax (SCT) on sugary beverages (with sugar content above 5g/100ml), gasoline, and air conditioners with capacities of 24,000-90,000 BTU, effective from January 1, 2026. The move aims to protect public health, the environment, and align with COP26 commitments.
The SCT on sugary beverages, proposed by the Ministry of Finance, follows recommendations from WHO, UNICEF, and the Ministry of Health to curb consumption of sugary drinks, a key cause of obesity, cardiovascular diseases, and diabetes. Vietnam’s per capita consumption reached 70 liters/year in 2023, four times higher than in 2009. The proposed tax rate is 8% from 2027, rising to 10% in 2028, allowing businesses time to adapt. The tax is expected to generate VND 2,400 billion annually initially while raising awareness and promoting low-sugar products.
However, the tax has sparked debate. Some experts worry that higher prices could reduce demand, impacting businesses’ revenue. Others argue there’s insufficient scientific evidence directly linking sugary drinks to obesity, citing factors like sedentary lifestyles. The law exempts milk, mineral water, natural fruit juices, and nutritional foods to ensure fairness.
The amended law also taxes gasoline and high-capacity air conditioners while exempting rescue vehicles. Approved by 448/454 delegates, the law is expected to regulate consumption, protect health, and support environmental goals. However, a reasonable roadmap is needed to minimize economic impacts.
