Daikin Vietnam Hopes for Relief as Lawmakers Consider Removal of Special Consumption Tax (SCT) on Air Conditioners
VIETNAM: Japanese-led air conditioner manufacturer Daikin Vietnam is eagerly anticipating a reduction in taxes following multiple proposals to eliminate the special consumption tax (SCT) on air conditioners.
A company representative explained that SCT is typically imposed on luxury goods or products that contribute to environmental pollution, pose health risks, or have a negative environmental impact. Other key players in Vietnam’s air conditioning market include Mitsubishi, Toshiba, Sharp, Aqua, LG, and Casper.
In late 2024, several National Assembly (NA) deputies, during discussions on amendments to the SCT law, suggested removing the excise tax. Currently, air conditioners with a capacity of 90,000 BTU or less are subject to a 10% tax, a rate that has remained unchanged since 2008.
Lawmakers argued that SCT is an indirect tax, meaning the burden ultimately falls on consumers as it is factored into the final product price. This, in turn, increases costs, potentially dampens demand, lowers living standards, and negatively impacts manufacturers. Daikin estimated that the tax-related costs could reach hundreds of thousands of US dollars annually.
Source: Daikin