Experts urge caution over proposed sugary drink tax in Việt Nam

Experts urge caution over proposed sugary drink tax in Việt Nam

At a forum on SCT held in Hà Nội on April 4, hosted by the Việt Nam Beer–Alcohol–Beverage Association (VBA), concerns were raised that a sudden imposition of the tax could deliver a “shock” to producers, disrupt business operations, and burden consumers.

An overview of the seminar. — VNS Photo Tiến Đạt

A roundtable discussion on the proposed amendment to the Law on Special Consumption Tax (SCT) for the beverage sector was held on April 4 in Hà Nội, hosted by the Việt Nam Beer–Alcohol–Beverage Association.

The draft law proposes adding sugary beverages (with over 5g of sugar per 100ml) to the list of items subject to SCT, citing the need to promote public health and prevent rising rates of obesity, particularly among children and adolescents. The proposal refers to recommendations from the World Health Organization (WHO), UNICEF and the Ministry of Health.

However, many experts expressed concerns over the scientific basis of the proposal and the potential economic impact. Associate Professor Dr Nguyễn Quang Dũng, Head of the Department of Nutrition and Food Safety at Hà Nội Medical University, noted that obesity is caused by a range of factors — including physical inactivity, genetics, medical conditions, and high consumption of fat, protein, salt and energy-dense foods — rather than sugar alone.

“Sugar consumption, or any single food product, should not be singled out as the main cause of obesity,” he said.

A 2023 report by the Việt Nam Institute for Economic and Policy Research (VEPR) found that urban students have higher rates of obesity than their rural peers, despite consuming sugary drinks less frequently. This suggests there is no clear causal link between sugary beverage consumption and obesity.

Globally, countries such as Hungary, France and Mexico have introduced sugar taxes, yet obesity rates continue to rise, according to WHO data.

In Việt Nam, any such tax should be approached cautiously, with thorough scientific assessments and clear communication. Experts warned that applying SCT rigidly to drinks with more than 5g of sugar per 100ml could confuse consumers, leading them to switch to untaxed alternatives with similar or higher sugar content.

Industry representatives said businesses would need at least 24 months to reformulate products, update production processes, and make financial adjustments to comply with the proposed policy.

While broadening SCT coverage to influence consumption and protect public health is deemed necessary, experts emphasised the importance of comprehensive impact assessments and a phased implementation to avoid economic shocks.

They stressed that any tax policy must adhere to principles of fairness, clarity, and efficiency — ensuring correct targeting without causing undue harm to enterprises or society.

The draft law is expected to be reviewed and debated at an upcoming session of the National Assembly. 

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