On November 12, 2024, EuroCham’s Wine and Spirits Sector Committee (WSSC) met with Mr. Laurent Lourdais, Deputy Head of Trade Section at the EU Delegation to Vietnam, to discuss critical industry issues, including the proposed amendments to Vietnam’s Special Consumption Tax (SCT), advertising and promotion regulations, and the development of an Extended Producer Responsibility (EPR) framework. The meeting was an opportunity to share insights and explore collaborative solutions for the challenges facing the sector.
Key Highlights from the Meeting
The session started with the Ministry of Finance’s (MOF) proposal to increase SCT rates for wine and spirits starting January 1, 2026. The preferred plan involves annual tax hikes of 5% over five years, reaching 70% for wines and 100% for spirits by 2030. Currently, SCT rates stand at 35% for wine and 65% for spirits. The WSSC highlighted the significant implications of this proposal, including its potential impact on related sectors like hospitality and tourism, as well as the risk of fostering illicit alcohol trade, which could reduce tax revenues and endanger public health.
Key Advocacy Points
- Delaying Implementation: WSSC urged for a delay in the SCT amendments until 2027, giving businesses time to adapt to economic conditions. The committee also called for periodic reviews of tax increases rather than automatic annual adjustments.
- Addressing Illicit Trade: Tackling the growing problem of illicit alcohol trade was a major focus. The WSSC expressed its readiness to work with the government to develop effective strategies for combating this issue.
- Reforming Tax Structures: The establishment of a taxation review working group was recommended to assess Vietnam’s economic context and explore a hybrid tax model. Such a model could pave the way for a single volumetric tax rate, aligning with international best practices while balancing public health and revenue objectives.
Advertising and EPR Challenges
The meeting also addressed other critical issues for the wine and spirits industry. Discussions covered the complexities of advertising and promotion regulations and the need for a robust EPR framework to ensure sustainability and regulatory compliance. Both topics are critical for fostering responsible business practices and long-term growth.
Collaborative Outcomes
The dialogue reaffirmed a shared commitment between EuroCham’s WSSC and the EU Delegation to support sustainable growth in Vietnam’s wine and spirits sector. Mr. Lourdais emphasised the importance of aligning Vietnam’s tax and regulatory framework with international standards, while addressing the unique challenges of the local market.
EuroCham’s WSSC looks forward to further collaboration with the EU Delegation and Vietnamese authorities to ensure that the industry thrives in a fair, sustainable, and well-regulated environment.
