Vietnam: Ministry proposes tobacco tax increase to VNĐ2,000

21 April 2018:

Students march in demand for stronger tobacco monitoring. – VNA/VNS Photo Phương Vy

HCM CITY – The Ministry of Health (MoH) on Thursday proposed to raise the tax on tobacco at a press conference on tobacco prevention hosted by the Ministry of Information and Communication.

According to the proposal, the tax imposed on a pack of cigarettes is expected to increase to VNĐ2,000 (US$0.088). Meanwhile, the draft law on Special Consumption Tax, which will come into effect in 2020, plans to put a tax of VNĐ1,000 ($0.044) on a pack of cigarettes or increase the tax from 75 to 80 per cent of the tobacco’s price from 2020 onwards and from 80 to 85 per cent from 2021 onwards.

Currently, tax on tobacco is 70 per cent of their prices.

The taxation policy aims to gain an additional tobacco tax revenue of VNĐ6,300 billion ($280 million) per year, decreasing the rate of male smokers by three per cent and reducing 300,000 early deaths caused by smoking.

Speaking at the conference, Phan Thị Hải, deputy director of the Tobacco Consequences Prevention Fund under MoH, said in 2015, Vietnamese people who smoked spent VNĐ31,000 billion ($1.4 billion) on tobacco, while the total treatment expense for smoking-related diseases was VNĐ24,000 billion ($1 billion).

According to a report of the World Health Organisation (WHO), 40,000 Vietnamese die of smoking-related diseases annually. The number is expected to go up to 70,000 in the coming years. Some 45.3 per cent men aged 15 and above are smokers, while 56 per cent start smoking before the age of 20, according to Phạm Thị Hoàng Anh, director of HealthBridge Canada Organisation in Việt Nam.

Experts believe the low price of tobacco products is the main cause leading to its widespread use.

In 2005-06, the per capita income in the country increased 4.7 times, but cigarette prices increased only 2.2 times.

Nguyễn Tuấn Lâm, a WHO representative in Việt Nam, told the Vietnam News Agency that the percentage of tobacco tax on retail price in Việt Nam (35.6 per cent) was much lower than the world average (56 per cent) and other countries in ASEAN, Thailand (73 per cent) and Singapore (66 per cent).

“A tax increase of 10 per cent is estimated to reduce tobacco consumption by four per cent in developed countries and by five per cent in developing countries. It will also contribute to reducing the smoking rate among the poor and the young,” Lâm said. 

By increasing tax to VNĐ5,000 ($0.22) per cigarette pack, Việt Nam can stop 1.8 million people from smoking, prevent 900,000 smoking-related early deaths and get VNĐ10,700 billion ($470 million) in the State budget.

Many studies have indicated that the smoke from a cigarette contains more than 4,000 chemicals, of which over 200 are toxic and additives, especially nicotine.

In April, Tobacco Consequences Prevention Fund, in collaboration with Vital Strategies, an international healthcare organisation, launched a mass media campaign on the harmful effects of tobacco consumption and its prevention. – VNS

Source: Vietnam News


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