Report Vietnam Urged to Revamp Tobacco Tax Policies to Combat Rising Affordability

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Phan Thi Hai, Deputy Director of the Tobacco Harm Prevention Fund, highlighted concerns over the growing affordability and accessibility of tobacco products in Vietnam, linked to rising average incomes. Speaking at a recent workshop in Hanoi, she noted that despite three increases in tobacco's special consumption tax from 2008 to 2019, these were insufficient to deter smoking behaviors significantly.

 

Hai pointed out that tobacco use remains a major health challenge, with tobacco smoke containing 7,000 chemicals, including 69 carcinogens contributing to cancer, cardiovascular, respiratory, and reproductive health conditions. According to the World Health Organization (WHO), tobacco use in Vietnam leads to approximately 85,500 deaths annually, with an additional 18,800 due to secondhand smoke.

 

Currently, Vietnam implements a 75% special consumption tax on tobacco based on factory prices. However, the minimal tax impact on retail pricing—due to low factory prices—has not curbed tobacco consumption. For example, a VND10,000 pack of cigarettes has a factory price of about VND3,900, making price increases negligible when accounting for inflation and income growth.

 

With only 36% of the cigarette retail price comprising taxes, Vietnam falls short of the WHO's recommended 70–75% tax level. This contrasts sharply with regional peers like Thailand, the Philippines, and Singapore, where tax shares are significantly higher.

 

Vietnam's low cigarette prices, among the world's cheapest, make these products easily accessible, particularly to low-income individuals and youth. WHO studies suggest that a 10% increase in cigarette prices could reduce consumption by about 4–5%, impacting youth more significantly due to their price sensitivity.

 

Findings from a 2023 survey by Hanoi University of Public Health and HealthBridge Canada indicate that many cigarette brands in Hanoi and Ho Chi Minh City retail for under VND10,000, further emphasizing affordability.

 

From 2010 to 2022, while Vietnam's per capita income grew by 203%, cigarette prices increased by only 56%, enhancing affordability. To counteract this, Hai argued for a reform in tobacco tax policy with a gradual approach to tax increments. She proposed implementing a minimum absolute tax of VND5,000 per pack by 2026, rising to VND15,000 by 2030, aligning with WHO recommendations and targeting reduced smoking rates in alignment with the National Tobacco Control Strategy.

 

Such fiscal measures aim to elevate cigarette prices in line with income growth, ultimately encouraging reduced consumption and supporting national health objectives.

 

  Adapted by ASEAN Now from VN Express 2025-05-13