The Ministry of Finance proposes to impose a special consumption tax on online games

DNHN - In the draught Law on Special Consumption Tax, which the Ministry of Finance has just sent to the Ministry of Justice, online games will be subject to a special consumption tax to limit production and consumption to reduce harm to society and health.

It is known that the Ministry of Information and Communications, the Ministry of Culture, Sports, and Tourism, the Vietnam E-Sports and Entertainment Association, the Vietnam Federation of Trade and Industry, and online game production and business enterprises oppose the imposition of an excise tax on this "smokeless business"

Although there are many opinions that the imposition of an excise tax on online video games (online games) could cause chaos in the domestic game industry, Vietnamese businesses are not adequately protected. Moreover, the Ministry of Finance has not yet approved the plan to impose an excise tax on online games because they are addictive and detrimental to players' health, despite the concerns of businesses in this industry.

According to the Institute of Mental Health at Bach Mai Hospital, 8.5% of Vietnamese are addicted to video games. Also causing mental disorders such as depression, anxiety, and stress are video games. Depression affects 12% of players, anxiety affects 13.5%, and stress-related disorders affect 17%.

According to these organizations, addiction to online games reduces social skills, causes insomnia, impairs academic and occupational performance, and even increases the risk of schizophrenia. Accordingly, nearly 22 percent of gamers have poor communication skills, and 18 percent have poor social skills. Nearly 16% of players suffer from insomnia, and 12% have a sleep disorder.

Government Inspectors, the Ministry of Public Security, and the Ministry of Foreign Affairs all concur that a more convincing study and evaluation of the impact on taxation is required.

According to the protest group, the national digital transformation program encourages the development of online games, which have the potential to become a smokeless industry in Vietnam. Five of the ten largest video game publishers in the region are Vietnamese companies.

The tax does not encourage domestic game companies to invest more in research and development, even though this is one of the few industries with significant growth potential. In addition, domestic companies' competitiveness will decline, making them more likely to relocate their headquarters abroad.

Currently, a game's revenue is generated by both users and advertisements. Therefore, according to some agencies, the tax administration will face numerous challenges. In addition, the protest group asserted that no nation imposes an excise tax on the online gaming industry.

Vietnam's game industry is a potential industry that requires state support for growth. The Ministry of Information and Communications asserted that there are sufficient legal grounds and other management tools to counteract the disadvantages of the game.

However, according to the Ministry of Finance, despite the absence of a special consumption tax policy for online game businesses, Vietnamese companies that produce games continue to establish their headquarters abroad.

According to this ministry, enterprises' decisions to invest abroad are influenced by a variety of factors, including their reputation, the company's position abroad, and administrative procedures. Therefore, it is erroneous to believe that implementing an excise tax policy will encourage Vietnamese companies to relocate their investments overseas.

Currently, the ministry intends to develop a strategy to transform Vietnam's online video game industry into a digital content industry leader and to promote Vietnamese culture worldwide. This vision would be difficult to realize if online games were subject to an excise tax.

Tax policy is necessary, but it is not the only factor that will determine the quality of the game industry's development in Vietnam. The issue is therefore how to implement a management mechanism and tax collection policy to keep this smokeless industry on track, thereby eliminating the negative risk of pirated games and budget revenue loss.

P.V (T/h)