Vietnam Implements New Tobacco Tax to Curb Smoking

Vietnam plans to introduce a new tobacco tax in 2027, gradually increasing to 10,000 dong per pack by 2031. Despite previous tax hikes, smoking remains prevalent with approximately 15 million smokers. The changes aim to reduce consumption and align tax levels with international recommendations.

Vietnam is set to implement a new excise tax on cigarettes beginning in 2027. The goal is to incrementally raise the tax to 10,000 dong per pack by 2031, as part of an effort to reduce smoking rates across the country, state media reported.

This move reflects an amendment to the Special Consumption Tax law, which introduces a mixed tax approach combining the existing 75% base rate with an additional levy starting at 2,000 dong per pack. The tax will increase over the coming years.

The health ministry reports that current tobacco tax levels represent just 36.8% of retail prices, significantly lower than global recommendations. These changes also come in response to health concerns, with an estimated 100,000 deaths annually linked to smoking.

(With inputs from agencies.)