The expert said focused, thorough studies on the individual additives are needed before jumping to wholesale conclusions about their effects on consumer health, Nam said.
In the meantime, Nguyen Dinh Chuc with the Central Institute for Economic Management said the tax, if applied, will increase carbonated drink prices, which will result in a slump in demand.
He estimated that the soft drink industry in Vietnam would suffer US$40.5 million in losses and the whole economy would lose $12.1 million.
Chuc advised the government to conduct a thorough study on the tax’s economic effects before applying it.
News website VnEconomy recently quoted a survey released by Danish-owned market research agency Epinion in April as saying that 73 percent of more than 600 interviewed people in Hanoi and Ho Chi Minh City said they will switch to other drinks, if the tax were to increase the price of carbonated drinks.
According to the finance ministry, last year Vietnamese consumers drank 925 million liters of carbonated drinks which were priced at VND11,987 (56 cents) per liter on average.
This means businesses would pay around VND1,200 per liter in consumption tax, which would not greatly affect them, the ministry said.
If the proposal is approved, it would bring the government some VND1.5 trillion ($71.1 million) worth of revenue in 2016.
Huong Giang Thanh Nien News
Đăng ký: VietNam News