Beer and wine are more expensive due to tax increase, who benefits and who loses?

A few years ago, I went on a trip to Singapore with a group of colleagues. Because we went in the summer, the weather was quite hot, so out of habit, at meals, the men ordered a few bottles of beer to cool down. But when it came time to pay, everyone was shocked because the beer prices here were too expensive. Not only were the prices of beer and wine especially expensive, but Singapore also applied a regulation prohibiting the sale and use of alcohol by the hour. My friends at that time said that nowhere was as delicious, nutritious, cheap and comfortable as in Vietnam. Because in Vietnam, a 330 ml bottle of Heniken Sleek beer is only about 50,000 VND, and a can is about 17,600 VND. "Grass" beer is even cheaper, only a few thousand VND/cup. And there is no time restriction, anyone can sit at the bar and drink as long as they want.

But according to the Ministry of Finance's report on the draft amendment to the Law on Special Consumption Tax sent to the Government, by 2030 the special consumption tax on alcohol will be 100%. This information has attracted much public attention because if implemented, this regulation will certainly affect many people. Drinkers will certainly be more cautious when entering a restaurant because the price of each bottle of beer and wine will increase significantly compared to the present when the tax rate will increase by 35%.

Beer bars, restaurants, and especially beer and wine companies will be the first to be affected. Restaurants and pubs have been hit hard by the Covid-19 pandemic, forcing them to "sit still" for several years and operate at a standstill. Before they could recover when the pandemic was over, they faced difficulties due to the implementation of Decree 100/2019/ND-CP and Decree 123/2021/ND-CP, which increase penalties for violations of alcohol concentration. Some people say that the capital of these units is "dying", and if this tax is added, some units may "die".

In fact, the special consumption tax rate on this item has been increased according to the roadmap from 2016-2018. However, Vietnam is still the country with the highest beer consumption in Southeast Asia and the third in Asia. One of the reasons is that compared to other countries in the region and the world, the special consumption tax rate on alcohol in our country is still low. According to calculations by the World Health Organization (WHO), in Vietnam, the tax only accounts for about 30% of the retail price of this item, while in many countries the tax rate accounts for 40-85% of the retail price. For example, Singapore imposes an absolute special consumption tax of 88 SGD/liter on alcohol (over 1.6 million VND), 60 SGD/liter on beer (over 1.1 million VND). Australia imposes a special consumption tax of 90.78AUD/liter (over 1.5 million VND) on wine, and 53.59AUD/liter (over 900,000 VND) on beer...

Statistics show that alcohol and beer rank 5th in the top 15 risk factors for health damage and cause many serious social consequences including: traffic accidents, injuries, domestic violence, loss of security and order...

As always, when a new regulation is first implemented, there can be many opposing opinions. Like when it was first implemented, requiring helmets when riding motorbikes, scooters, electric vehicles, or banning fireworks, or most recently increasing penalties for alcohol violations... But time has proven that the above regulations are correct, people have formed the habit of complying in just a short time. The benefits and gains outweigh the losses.

I think the same is true of increasing excise tax on alcohol and beer. This is necessary, in line with the general trend of the world, and compatible with other legal regulations of Vietnam. Applying high tax rates will help reduce consumption and limit alcohol abuse. This will be better for health, safer for the lives of the people themselves, reduce the cost of treating diseases caused by alcohol abuse, reduce damage caused by traffic accidents caused by alcohol, etc.

What is good for the people should be done soon.