Industry Seeks Fruit Juice Exemption from New Drink Tax
The Vietnam Chamber of Commerce and Industry (VCCI) has formally requested that fruit juice-based beverages be exempted from the new special consumption drink tax.
VCCI submitted this critical recommendation to the Ministry of Finance, offering feedback on the draft regulations that will implement the new Special Consumption Tax Law.
The prominent business group specifically argues for the exclusion of beverages made from fruit juice, fruit extracts, or reconstituted concentrated juice from the impending tax legislation.
VCCI’s core argument is that “Fruit juices are naturally sourced products containing vitamins and nutrients beneficial to health, fundamentally different from ordinary industrial beverages,” cautioning that the imposition of a drink tax could inadvertently discourage consumers from choosing healthier product options.
The chamber maintains that fruit juice products clearly meet the existing definition of ‘fruit juice’ as outlined under Vietnamese Standard TCVN 12828:2019, which currently grants them exemption from the special consumption tax.
Consequently, VCCI has urged the ministry to provide definitive clarity on the crucial distinction between genuine fruit juices and other soft drinks within the final regulatory framework to prevent misapplication of the tax.
This clarification is vital for manufacturers and consumers alike to ensure that the health-focused intent of excluding natural, nutrient-rich products is fully realized under the new special consumption drink tax.
Clarity Demanded on Sugar Measurement and Tax Implementation
Beyond the significant issue of excluding fruit juice, the VCCI has also strongly advocated for clear and consistent guidance on the methodology for measuring sugar content, a critical factor for determining which products are subject to the new drink tax.
The business community proposed a practical approach: utilizing the total sugar levels already declared by manufacturers on their product labels. To account for natural variations, they suggest allowing a reasonable tolerance margin of 20% from the declared amount.
Furthermore, VCCI recommended the adoption of high-performance liquid chromatography (HPLC) testing as the standard method to ensure the accuracy and reliability of sugar content verification.
The National Assembly officially passed the amended Special Consumption Tax Law in June 2025, a landmark piece of legislation that imposes the drink tax on beverages that contain more than 5g of sugar per 100ml of product.
The implementation of this drink tax will be phased: starting at 8% in 2027 and subsequently rising to 10% in 2028.
The law is comprehensive, covering a wide range of products including flavored beverages, energy drinks, sports drinks, and drinks based on coffee, tea, herbal extracts, fruit, and cereal.
However, several categories are explicitly exempt, such as milk products, nutritional liquids, mineral water, bottled water, pressed vegetables and fruits, and cocoa products, highlighting the policy’s attempt to differentiate between sugary treats and essential nutritional items.
The Wider Scope of the Special Consumption Tax Law
The Ministry of Finance has yet to issue an official response regarding the detailed and well-supported recommendations put forth by VCCI, leaving the industry in a state of anticipation regarding the final specifics of the new regulations.
The ultimate goal of the Special Consumption Tax Law is to utilize fiscal policy to steer public health outcomes by making excessively sugary products less financially attractive to consumers.
By focusing the drink tax on high-sugar beverages, the government aims to encourage a broader shift toward healthier consumption habits and pressure manufacturers to reformulate their products with reduced sugar levels, thereby mitigating the rising public health risks associated with excessive sugar intake.
The successful implementation relies heavily on the final regulatory clarity sought by VCCI, especially concerning the technical definitions of fruit juice and the precise methods for measuring sugar content consistently across the diverse industry landscape.
If the drink tax is applied too broadly, it risks unintended consequences, such as stifling innovation or unfairly penalizing products with natural sugars that offer genuine nutritional benefits, which is the very outcome VCCI is attempting to prevent through its detailed feedback submission to the Ministry of Finance.
