Proposal to increase taxes on cigarettes and sugary drinks

On September 20, in Hanoi, the Ministry of Health held a workshop on the need to increase special consumption tax on items harmful to health to achieve the goal of reducing the rate of use of alcohol, tobacco, and sugary drinks for the benefit of public health.

At the workshop, experts from the Ministry of Health and representatives of the World Health Organization (WHO) in Vietnam highly appreciated the fact that the draft revised Law on Special Consumption Tax, which is being consulted, has added a number of goods that are harmful to health, such as cigarettes and soft drinks with sugar content of more than 5g/100ml. Applying special consumption tax to products that are harmful to health is important and necessary to protect people's health.

Proposal to increase tobacco tax to reduce the number of users

Mr. Nguyen Tuan Lam, a non-communicable disease prevention expert of WHO in Vietnam, stated that tobacco products, alcohol and sugary drinks are directly harmful to people's health and cause many consequences in the future. International experience shows that increasing tobacco taxes is the main measure to reduce demand, but this solution is being implemented very little in Vietnam. In Southeast Asia, Vietnam is in the top 3 countries with the cheapest tobacco prices, just behind Laos and Cambodia.

Some studies show that there are about 40 brands priced under VND10,000/pack of cigarettes. Moreover, the product market is very diverse, with many cheap cigarettes, making it easy for consumers to choose. Therefore, Vietnam needs to increase taxes on a regular schedule so that cigarette prices keep up with income growth and gradually move towards the optimal tax rate of 70-75% of retail prices as recommended by WHO.

Vietnam has very low tobacco taxes and prices in the region.

For sugary drinks, a tax roadmap should be considered to achieve a tax of 20% of the retail price (i.e. a 40% increase in the manufacturer’s selling price) as recommended by WHO to reduce the health risks to future generations. In the longer term, a tax based on sugar content or a threshold should be considered to encourage sugar reduction.

MINH KHANG

Source: https://www.sggp.org.vn/de-nghi-tang-cao-thue-thuoc-la-va-do-uong-co-duong-post759941.html