Brian Jeffrey
A World Health Organization (WHO) expert has indicated that Vietnam’s tobacco tax hikes are insufficient, contributing only 15-20% towards lowering smoking prevalence. The country faces over 100,000 smoking-related deaths annually.
This topic was discussed during a session titled “Special Consumption Tax (SCT) Plans Aimed at Achieving Vietnam’s National Strategy on Tobacco Harm Prevention by 2030,” held by the National Assembly Television in Hanoi on October 18.
Nguyen Tuan Lam, a WHO specialist, emphasized that while Vietnam has made progress with advertising restrictions and public awareness campaigns, these strategies show diminishing returns. In contrast, increasing tobacco taxes remains the most effective way to diminish smoking rates.
The proposed changes to the Special Consumption Tax Law suggest maintaining the current tax rate of 75% on tobacco while adding a new tax that would gradually rise from 2026 to 2030, with two possible approaches outlined.
The first option suggests an introduction of an additional 2,000 VND per pack in the first year, followed by similar increments annually, culminating in a total increase of 10,000 VND per pack by 2030.
Recent data show that smoking claims over 100,000 lives yearly in Vietnam, with 84,500 due to direct smoking and 18,800 resulting from second-hand smoke.
The alternative scenario proposes starting with a 5,000 VND hike per pack in 2026, followed by an additional 1,000 VND for three years, and a 2,000 VND rise in 2030, also reaching a total of 10,000 VND per pack by the end of the period.
Angela Pratt, WHO’s Vietnam representative, advocates for a greater tax increase to 15,000 VND per pack by 2030. Coupled with the existing proportional tax, this aims to lower smoking rates among men to 35.8% by 2030, aligning with national tobacco reduction goals.
This suggested method is projected to significantly enhance the government’s tax income, potentially adding an excess of 29.3 trillion VND yearly to the national budget by 2030 relative to the figures from 2020.
Hoang Thi Thu Huong from the Ministry of Health remarked on the evolution of tobacco taxes in Vietnam, noting that the Special Consumption Tax was first introduced at 45% in 1999 and was raised to 55% between 2006 and 2007.
From 2008 to 2019, the tobacco tax saw three adjustments: increased to 65% in 2008, then to 70% in 2016, and finally to 75% in 2019.
“Overall, these tax increases have been gradual and spaced too far apart to effectively impact the affordability and consumption of cigarettes, especially as people’s incomes in Vietnam have been rising,” Huong commented.
Le Thi Thu from the Campaign for Tobacco-Free Kids noted that from 2006 to 2024, the tobacco SCT had risen by merely 20%, which averages about a 1.1% annual increase, while the economy expanded by 4-5% annually.
The legislative proposal regarding the tobacco tax adjustment will debut at the 8th National Assembly session set for October 21, with a final resolution anticipated by May 2025.
“The goal of this roundtable is to collect valuable insights to assist lawmakers and decision-makers in crafting effective strategies,” stated Le Quang Minh, the General Director of National Assembly Television.
The tobacco harm prevention strategy, issued by the Prime Minister on May 24, 2023, aims to decrease smoking rates among men aged 15 and older below 39% by 2025, and for women, below 1.4%.
By 2030, the target is to lower the smoking prevalence among men to under 36% and women to less than 1%.
The strategy also outlines the need for a roadmap for tobacco tax increases, ensuring by 2030 the rate aligns with WHO recommendations regarding retail prices. The Ministry of Finance is charged with spearheading this initiative alongside the Ministry of Health and other pertinent agencies to meet the objectives of reducing tobacco usage.
