Special Consumption Tax - Latest Updates On Gasoline And Air Conditioner Taxes

In the context of the draft revised Law on Special Consumption Tax being of interest, the imposition of taxes on gasoline and air conditioners has become a hot topic. The drafting agency has thoroughly researched international experiences and diverse opinions to propose appropriate tax levels that both guide consumption and protect our living environment.

Speaking at the session of the National Assembly Standing Committee regarding the draft revised Law on Special Consumption Tax, Deputy Minister of Finance Cao Anh Tuan clarified several important issues, especially proposals related to taxes on tobacco, pickup trucks, soft drinks, air conditioners, and gasoline.

Special Consumption Tax On Tobacco

To ensure transparency and ease of comparison in law enforcement, the drafting agency is considering specifying the types of tobacco subject to tax. This is to align with the Law on Prevention and Control of Tobacco Harms, and detailed guidance is needed for effective practical application.

Authority to amend and supplement taxable objects

Deputy Minister Cao Anh Tuan emphasized that the drafting agency’s viewpoint is to ensure flexibility and proactiveness to promptly adjust the objects subject to special consumption tax. The proposal to assign authority to the Government to amend and supplement taxable objects is to quickly respond to the changing demands of the country’s socio-economic situation.

Special Consumption Tax On Pick-Up Trucks And Soft Drinks

The Government always cares about and creates favorable conditions for production and business. In recent years, many policies supporting businesses have been implemented, with a total value of tax exemptions, reductions, deferrals, and extensions reaching approximately 200 trillion VND per year. Currently, the Government is also submitting to the National Assembly for consideration of a 2% reduction in value-added tax for the last 6 months of 2025.

For double-cabin cargo pickup trucks, the current registration fee is 60% compared to cars. As double-cabin pickup trucks have a design similar to cars (4 seats), applying a special consumption tax rate of 60% of the car tax rate is considered appropriate and proportionate.

Regarding soft drinks with a sugar content above 5g/100ml, the World Health Organization (WHO) and international organizations recommend that the special consumption tax rate should be 30-40%. However, after considering various factors, the Government proposes a 10% tax rate for this item. The goal is to encourage businesses to produce low-sugar drinks, while raising consumer awareness and changing consumer behavior.

Special Consumption Tax On Air Conditioners

Deputy Minister Cao Anh Tuan further clarified the tax regulations for air conditioners with a capacity of 90,000 BTU or less (excluding types specifically designed for transportation vehicles). In the context of increasing demand for air conditioner use, taxation is necessary because many air conditioners use refrigerants that harm the ozone layer and consume a lot of electricity, impacting the environment.

Many countries around the world such as South Korea, India, Norway, and European countries have applied taxes or measures to restrict the use of air conditioners. Vietnam’s continued collection of special consumption tax on small capacity air conditioners is in line with international trends, aiming to guide energy-saving consumption and environmental protection.

Special Consumption Tax On Gasoline

Gasoline is a non-renewable fossil fuel, and many countries have imposed high taxes on gasoline while providing tax incentives for environmentally friendly biofuels (such as South Korea, Singapore, Australia). In Vietnam, gasoline has been taxed since 1995, and the tax rate for biofuels has always been lower to encourage the use of green fuels.

Evaluation And Acknowledgment

The National Assembly Standing Committee highly appreciated the proactiveness, activeness, and effective coordination between the drafting agency and the thẩm tra (verification) agency in incorporating the opinions of National Assembly deputies at the 8th Session and completing the draft Law.

National Assembly Vice Chairman Vu Hong Thanh requested the National Assembly’s Economic and Financial Committee to continue to closely coordinate with the drafting agency to finalize the dossier and submit it to the National Assembly for approval at the upcoming session. He also emphasized the need for a thorough assessment of the advantages, disadvantages, and impacts of each option to ensure persuasiveness when submitted to the National Assembly.

The imposition of special consumption tax on gasoline, air conditioners, and several other items in the draft revised Law on Special Consumption Tax is an important step, demonstrating the State’s proactiveness in guiding consumption, protecting the environment, and harmonizing socio-economic benefits. The draft law continues to be finalized for submission to the National Assembly for consideration and approval, promising to create positive changes in the near future.