A World Health Organization (WHO) expert has stated that tax increases on tobacco in Vietnam have been too modest, currently accounting for only 15-20% of efforts to reduce smoking rates. Each year, over 100,000 people die due to smoking-related causes in the country.

The discussion, titled “Special Consumption Tax (SCT) Plans Aimed at Achieving Vietnam's National Strategy on Tobacco Harm Prevention by 2030,” was organized by the National Assembly Television in Hanoi on October 18.

Nguyen Tuan Lam, an expert from the World Health Organization, pointed out that while measures such as advertising bans, warnings, and media campaigns have been implemented and are nearing saturation with limited further impact, tax increases remain the most effective measure for reducing tobacco use.

“According to international experience, tax hikes account for 60% of the reduction in tobacco consumption. However, in Vietnam, recent tax increases have only contributed to 15-20% of the effort, resulting in persistently high smoking rates,” Lam noted.

The draft amendment to the Special Consumption Tax Law proposes maintaining the existing tax rate of 75% on tobacco while introducing an additional absolute tax that would increase incrementally each year from 2026 to 2030, with two different proposed scenarios.

The first scenario proposes adding 2,000 VND per pack in the first year and increasing by the same amount each subsequent year, reaching 10,000 VND per pack by 2030.

Latest statistics reveal that over 100,000 people die annually in Vietnam due to smoking, with 84,500 deaths attributed to active smoking and 18,800 due to passive smoking.

The second scenario suggests an initial increase of 5,000 VND per pack starting in 2026, with an additional 1,000 VND per pack increase for the next three years, and a 2,000 VND increase per pack in 2030, totaling 10,000 VND per pack by 2030.

Angela Pratt, WHO Representative to Vietnam, has proposed that Vietnam should implement an absolute tax increase reaching 15,000 VND per pack by 2030. Combined with the current proportional tax rate, this would help reduce the smoking rate among men to 35.8% by 2030, in line with the national target for reducing tobacco use.

This approach would also significantly boost annual tax revenue, adding an estimated 29.3 trillion VND annually to the national budget by 2030 compared to 2020 levels.

Hoang Thi Thu Huong, a legal expert at the Ministry of Health, highlighted the history of tobacco tax increases: Vietnam first applied the Special Consumption Tax on tobacco in 1999 at 45%. The rate was raised to 55% between 2006 and 2007.

From 2008 to 2019, the SCT on tobacco underwent three increments: the rate increased to 65% in 2008, then to 70% in 2016 (after 8 years), and finally to 75% in 2019 (after 3 years).

“The incremental tax increases have been minimal, and the long intervals between hikes have not been sufficient to curb purchasing power and reduce consumption. As the average per capita income in Vietnam continues to grow each year, cigarettes have become more affordable and easier to access,” Huong remarked.

Le Thi Thu, a specialist from the Campaign for Tobacco-Free Kids in Vietnam, added: "From 2006 to 2024, the SCT on tobacco has only increased by 20%, equating to an average annual increase of about 1.1%, while the economy has grown by 4-5% per year."

The draft amendment to the Special Consumption Tax Law, which includes provisions on tobacco products, is set to be presented for the first time at the 8th National Assembly session beginning on October 21, with a final decision expected by May 2025.

“This roundtable discussion aims to gather insights and reference information to aid lawmakers and policymakers in making informed and effective decisions to achieve all set targets,” said Le Quang Minh, General Director of National Assembly Television.

The national strategy on tobacco harm prevention, issued by the Prime Minister on May 24, 2023, sets the target of reducing the smoking rate among men aged 15 and older to below 39% by 2025, and among women aged 15 and older to below 1.4%.

By 2030, the goal is to reduce the smoking rate among men aged 15 and older to below 36%, and among women to below 1%.

The strategy also calls for the development of a tax increase roadmap for tobacco products, ensuring that by 2030, the tax rate reaches the percentage of retail price recommended by the WHO. The Ministry of Finance is tasked with leading this initiative, in collaboration with the Ministry of Health and other relevant agencies, to achieve the goal of reducing tobacco use.

Binh Minh