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The Ministry of Finance (MOF) has proposed amendments to the 2008 Law on Excise Tax, focusing on taxable and non-taxable objects. The proposed changes aim to better align tax regulations with policies on public health protection and the management of high-end products and services.
Taxation on Sugary Beverages
To curb sugar consumption and protect public health, the draft law proposes a 10-percent excise tax on sugary beverages containing more than 5 grams of sugar per 100 milliliters. However, certain beverages, such as coconut juice, milk and dairy products, fruit juice, and chocolate drinks, may be exempt. The Government will issue a specific list of sugary drinks that are not liable to excise tax.
This initiative aligns with the World Health Organization (WHO)’s recommendations for Vietnam and other countries. Angela Pratt, WHO Representative in Vietnam, emphasized that increasing the price of sugary drinks through taxation is a globally recognized strategy to reduce their consumption. The measure aims to mitigate obesity rates, particularly among children, and lower the risk of non-communicable diseases in future generations.
Increased Taxation on Alcohol and Tobacco
The draft law maintains the excise tax on liquor and beer while introducing an annual tax increase from 2026 to 2030. The objective is to ensure that alcohol prices rise by at least 10 percent over time, in line with WHO recommendations to reduce alcohol consumption and its associated harms.
For tobacco products, including cigarettes, cigars, and other forms used for smoking, inhaling, chewing, or sniffing, the current tax rate of 75 percent will remain in place. Additionally, an absolute tax component will be introduced, increasing annually from 2026 to 2030. This measure supports Vietnam’s goal of reducing the smoking rate among males aged 15 and older to below 36 percent during the 2026-2030 period, in accordance with the National Strategy for Prevention and Control of Tobacco Harms and WHO guidelines.
Excise Tax on Air Conditioners and Luxury Goods
A 10-percent tax will continue to apply to air conditioners with a capacity of less than 90,000 BTU, except for those specifically designed for transport vehicles such as cars, railroad cars, ships, boats, and airplanes. In cases where indoor and outdoor air conditioner units are manufactured or imported separately, they will also be subject to the tax.
The draft law maintains excise tax imposition on luxury goods, including aircraft, helicopters, gliders, and cruises for personal use, as well as entertainment activities such as casinos, betting, and golf.
However, aircraft, helicopters, gliders, and cruises used for security and national defense purposes, as well as for commercial transport, training, pesticide spraying, firefighting, filming, and surveying, will remain exempt from excise tax.
Changes to Tax Exemptions for Vehicles and Goods in Non-Tariff Zones
The draft law clarifies that passenger cars and four-wheeled motorized passenger vehicles that are not registered for circulation but operate within historical sites, hospitals, schools, and other special-use areas specified by the Government will not be subject to excise tax.
Notably, goods imported into non-tariff areas and those sold from inland to non-tariff areas—except for under-24-seat cars, which are currently tax-exempt—will become taxable under the revised law.
Government Authority Over Excise Tax Modifications
The draft law grants the Government the authority to modify the list of taxable and non-taxable objects periodically, ensuring alignment with Vietnam’s socio-economic development.
The National Assembly is scheduled to review and pass the proposed amendments in May. If enacted, these changes could significantly impact consumer behavior, public health, and revenue generation for Vietnam.
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