Brian Jeffrey
The Ministry of Health (MOH) reveals that healthcare costs related to tobacco illnesses reached VND108 trillion in 2022, 1.14 percent of GDP.
Revenue from tobacco amounted to just VND17.6 trillion, one-fifth of the healthcare expenses.
Despite three tax hikes on tobacco in the period of 2008-2019, the increases were minimal and spaced too far apart.
The tax rate went from 55 percent to 75 percent in three increments, with the state’s collection totaling only 38.8 percent based on retail prices.
Vietnam still maintains low tobacco tax rates compared to ASEAN countries, with prices lower than in Thailand and slightly higher than in Laos and Cambodia.
Cigarette prices in Vietnam are notably lower and easily accessible to both adults and children.
A study in Hanoi and HCM City found nearly 40 tobacco brands priced below VND10,000 per package.
Parents allowing children to spend money on cigarettes is a common occurrence due to the low prices.
The Ministry of Finance presents two options for raising tobacco taxes, aiming to gradually increase taxes by 2030.
The Vietnam Tobacco Association proposes much lower tax hikes than the ministry suggests, which the ministry opposes, stating that the proposed increase isn’t sufficient to deter cigarette purchases.
The WHO recommends higher tax raises on cigarettes to effectively reduce smoking rates, advocating for a VND5,000 immediate increase per package and a VND15,000 hike by 2030.
The Ministry of Health advocates for a VND15,000 tax per package by 2030, combined with a 75 percent luxury tax rate, which aligns closely with WHO recommendations to decrease male smokers significantly.
