Gaming sector fears special tax
Vietnam is considering levying a special consumption tax on online video games, which has caused concern in the sector.
The Ministry of Finance is currently collecting feedback from those affected on the proposed amendment to the Law on Special Consumption Tax (SCT), which includes bringing online video games into the subject of excise tax. Businesses in the sector are worried it will lead to adverse effects on their development.
Duong Truong Minh, director of the International Business Centre at Gosu Corporation, said that registered games would be directly affected if online games were added to the SCT.
“The application of the special consumption tax will increase the price of game products, thereby reducing the number of consumers and sales of games,” Minh said.
Furthermore, the SCT will indirectly reduce the demand for legal services in Vietnam and lead consumers closer to using illegal services from abroad.
As the prices of domestic game products increase, players may seek illegal game software or free games to avoid high expenses. This could indirectly encourage customers to use unlicensed games, causing revenue losses for legitimate game manufacturers and publishers.
“Meanwhile, foreign businesses that are not registered and do not pay taxes or comply with Vietnamese laws are not subject to any restrictions,” Minh said.
There are more than 220 licensed game businesses in Vietnam, but the number of companies that are actually operating and providing games to the market is only about 20.
According to the Authority of Broadcasting and Electronic Information of the Ministry of Information and Communications (MIC), as of November 2022, there were 248 companies licensed to provide G1 online gaming services in the country, including 54 companies that have ceased operations or had their licenses revoked.
The number of approved electronic games with approved content and scenarios is 1,327, including 856 games currently in circulation and 471 games that have been announced as discontinued. Read More…
