30% tax proposed for SMS voting, prediction services
30% tax proposed for SMS voting, prediction services
Programs that invite customers to predict football results or cast votes for contestants in reality TV shows by sending text messages should be subject to an excise tax worth 30 percent, the Ministry of Finance has proposed.
SMS voting has become a common service in Vietnam over the last few years, in conjunction with the boom of popular reality TV shows such as Vietnam’s Next Top Model, Vietnam Idol, and The Voice of Vietnam.
Audiences can vote for their favorite contestants by sending text messages with the services operated by the country’s largest mobile network operators—Vinaphone, MobiFone, and Viettel—under cooperation with the organizers of the programs.
SMS voting is also applied in predicting football results and those of other sports events.
Customers are currently charged VND5,000 to VND15,000 for each text message sent to such services, while the normal cost is only VND350 per message.
Revenues from these messages are divided among the network operators and the program organizers as agreed in their contracts.
Currently, the network operators only declare and pay value-added taxes for revenues from these services, while they are exempt from the excise tax because SMS voting is not counted as gambling, according to the finance ministry.
The ministry said SMS voting and prediction is in fact just like betting, so it must be treated the same as gambling and lottery businesses, which are currently subject to excise taxes.
“Hence, in order to maintain equality between these program organizers and the betting service providers, the SMS voting and prediction services should be subject to an excise tax,” the finance ministry said in a draft amendment to the tax law.
The suggested tax rate is 30 percent and it should be applied starting July 1, 2015, the ministry said.
The Ministry of Finance has also proposed the increase of excise taxes for tobacco and alcohol by 15-30 percent from current rates.
The new excise tax for beer and alcohol will be 65 % rather than the current 50 %, while the tax on tobacco will increase to 75 % from 65 %.
The ministry said the higher taxes are intended to limit the consumption of these products, promoting better health.
These proposals have been submitted to the government for consideration.
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