According to the WHO, imposing a special consumption tax on sugary drinks in Vietnam is necessary as this will help protect public health, reduce health costs, and increase the state budget.
WHO emphasised that regular consumption of sugary drinks increases the risk of diseases such as cardiovascular disease and cancer. This is a serious problem, because these groups of diseases are the leading cause of death in Vietnam.
According to Dr. Angela Pratt, Chief Representative of WHO in Vietnam, “To limit the use of sugary drinks, taxing sugary drinks is a mutually beneficial solution, both contributing to health protection and reducing medical costs. At the same time, this is also a source of revenue for the government budget.”
She mentioned that consumers will tend to switch to healthier drinks once the new tax regulation is in place, while manufacturers will make adjustments to their drinks formulation to meet new consumer needs.
Dinh Thu Thuy from the Department of Legal Affairs, Ministry of Health added that regular consumption of sugary drinks increases the risk of metabolic disorders such as type 2 diabetes, cardiovascular disease, high blood pressure, gout… while harming the teeth and negatively affecting bone and joint health. Indirectly, this will also not be beneficial to the economy in the long term.
Ms. Thuy mentioned that applying special consumption tax is an intervention solution which can improve and reduce public health burden – reduce health care costs, improve labour productivity and improve state budget.
Ms. Thuy said that currently, the Ministry of Health has agreed on the proposed plan for the Special Consumption Tax Law by the Ministry of Finance in Submission No. 147/TTr-BTC dated 15 April 2025. Accordingly, the special consumption tax rate for sugary drinks may extend the application period and roadmap to 8% from 2027 and 10% from 2028.
Meanwhile, industry experts still voice their concerns over the special consumption tax, and have called on the government to reconsider proceeding with the implementation of the tax, as businesses are still struggling from higher production costs and yet to recover from the pandemic. Imposing the tax could also lead to reduced production and lower competitiveness.
Several experts blame the causes of cardiovascular diseases and obesity to poor diet, lack of sleep and physical activity, and not entirely on sugar consumption.
There is also a possibility that taxing on beverages could lead towards consumption of cheaper, unlabelled alternatives which could even pose greater health risks in the longer term.
