Vietnam: Heineken urges Vietnam to reconsider excise tax

Vietnam should reconsider raising the excise tax on alcoholic drinks, including making a timeline for gradual implementation and different tax rates for different products, says Heineken Vietnam managing director Wietse Mutters, The Investor reported on October 3.

Wietse Mutters, who became head of Heineken Vietnam in August, made the suggestion at a Tuesday meeting with Ho Chi Minh City Chairman Phan Van Mai. The executive also called on HCMC authorities to help Heineken deliver the recommendations to higher authorities.

Backing the suggestions, Mai said he would discuss the issues with ministries and committees of the National Assembly. He also urged Heineken Vietnam to further help HCMC’s green economic growth plan, towards carbon neutrality.

Mutters noted that renewable energy now accounts for 99% of the Heineken plants’ activities in Vietnam, and Heineken Vietnam has reduced carbon emissions by 93% versus 2018, towards neutrality in 2030.

Mutters also highlighted Heineken’s economic contributions to Vietnam, including investments exceeding €1 billion, being the largest Dutch investor in Vietnam to date.

Heineken has so far created over 172,500 jobs and accounted for nearly 0.5% of Vietnam’s GDP. In 2024, Heineken Vietnam is expected to contribute VND12 trillion ($485.8 million) to HCMC’s budget.

The National Assembly, Vietnam’s highest legislative body, is set to discuss the draft amended excise tax law at its upcoming plenum this month and will vote on its passage at the next meeting in May 2025.

In its latest draft on excise tax, the Ministry of Finance has not taken into account Heineken’s suggestion for a hybrid tax calculation for beer. In general, there are three taxation methods – ad valorem tax (proportional to the value of the underlying asset), specific tax (constant figure), and hybrid tax as a mixed formula between ad valorem tax and specific tax.

Heineken was the only premium beer brand to make such a proposal, the ministry noted. Many businesses and agencies opposed the suggestion and wanted continuity of ad valorem tax calculation for excise duties.