Vietnam Eyes Cigarette Tax Increase to Snuff Out Smoking Rates

Vietnam’s revised Law on Excise Tax is expected to be passed in May next year, with a key focus on curbing the deadly smoking habit in the country. According to statistics from 2021, Vietnam has a significant smoking population, with over 15 million smokers consuming up to four billion packs of cigarettes annually.

The issue is not just limited to the high number of smokers but also the alarming rate of cigarette production. In 2023 alone, local manufacturers produced 5.3 billion packs of cigarettes, contributing to a growing number of health issues in the country.

Medical experts have raised concerns about the serious public health impact of smoking, and increasing excise taxes on cigarettes is seen as a crucial step in addressing this challenge. By making smoking a more expensive habit, the government aims to deter people from starting or continuing this harmful practice.

Addressing the Issue of Low-Cost Cigarettes

Currently, the excise duty on tobacco in Vietnam is set at 75% of the factory price. To reduce cigarette consumption, the government has proposed two solutions: keeping the excise tax rate unchanged while introducing an additional tax per pack, with two different road maps for the absolute rate.

The first solution involves adding a tax of VND2,000 per pack starting in 2026, with annual increases of VND2,000 per pack from 2027 to 2030. By the end of this period, the absolute rate is expected to reach VND10,000 per pack.

The second solution, which the government strongly prefers, proposes that if the amended Law on Excise Tax comes into effect in 2026, the unhealthy product will be taxed at an absolute rate of VND5,000 per pack, with annual increases of VND1,000 per pack until 2030, reaching VND10,000 per pack.

These solutions were carefully considered, taking into account cigarette prices in Vietnam and aligning them with the population’s income. The government believes that this approach will effectively reduce cigarette consumption while ensuring affordability for smokers during the transition period.

Health Risks and Smoking-Related Diseases

The Vietnam Steering Committee on Smoking and Health has identified strokes, coronary artery disease, chronic obstructive pulmonary disease, and lung cancer as the leading causes of death among smokers. A report from the Vietnam National Cancer Hospital further emphasizes the link between smoking and lung cancer, with 96.8% of patients being smokers.

Dr. Nguyen Huy Quang from the Vietnam Medical Association stressed the necessity of increasing excise duties on cigarettes due to their harmful impact on public health. He predicts that a 10% price increase following higher taxes could lead to a 5-8% drop in cigarette users.

The proposed excise tax hike has received strong support from the Ministry of Health, the World Health Organization (WHO), the World Bank, and various health protection organizations. They recognize the potential effectiveness of this approach in reducing smoking prevalence and improving public health.

Some experts have even suggested a third solution with an even steeper tax rise. This proposal includes an additional duty of VND5,000 per pack in 2026, increasing to VND7,000, VND10,000, and VND15,000 in subsequent years, reaching 2030.

Dr. Angela Pratt, a representative of WHO in Vietnam, acknowledged the country’s progress in the fight against cigarettes over the past decade but noted that Vietnam still has one of the highest smoking prevalence rates in the region, with over 15 million smokers.

The low price of cigarettes in Vietnam, resulting from low taxes, is a significant factor contributing to the high smoking rate, according to Pratt. Currently, taxes account for only 36% of the retail price of cigarettes, much lower than the global average of 62%. WHO recommends that tobacco taxes should make up at least 75% of the retail price to effectively discourage smoking.

The Rise of E-Cigarettes and Vapes

While Vietnam has made strides in reducing traditional cigarette smoking, it now faces a new challenge with the growing popularity of e-cigarettes and vapes, especially among women and young people. The rate of students aged 13-15 who reported vaping increased from 3.5% in 2022 to 8% in 2023, causing concern among health professionals.

Dr. Nguyen Trung Nguyen, director of the Bach Mai Poison Control Center in Hanoi, has treated several patients suffering from multi-organ failure and poisoning due to e-cigarette use. In 2023, medical facilities across Vietnam treated 1,224 patients with diseases linked to e-cigarettes, underscoring the urgent need to address this emerging trend.

The Ministry of Health, with the support of experts and doctors, has implemented various measures to combat the negative impacts of e-cigarettes and is considering a plan to ban new-generation tobacco products, including vapes, e-cigarettes, and heated tobacco. This would align Vietnam with several other Southeast Asian countries that have already taken a stand against e-cigarettes.

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