Proposed solutions to reduce the number of smokers and the cost of disease

In the Draft Law on Special Consumption Tax, the Ministry of Finance has proposed two options for adjusting special consumption tax on tobacco products.

In the Draft Law on Amended Special Consumption Tax, the Ministry of Finance has proposed two options for adjusting special consumption tax on tobacco products. Accordingly, the Ministry proposes to maintain the current special consumption tax rate (75%) and add an absolute tax rate.

With the two tax increase options proposed by the Ministry of Finance, according to Ms. Phan Thi Hai, Deputy Director of the Tobacco Harm Prevention Fund (Ministry of Health), both options implement a mixed special consumption tax system, including a steady increase in absolute tax rates to reduce the ability to pay for cigarettes over time.

“Option 2 is superior because it is more consistent with global best practice that mixed excise taxes should rely more on absolute tax rates,” Ms. Hai emphasized.

According to the Deputy Director of the Tobacco Harm Prevention Fund, option 2 will reduce the number of smokers from the early years of the 2026-2030 period, bringing greater benefits in terms of disease prevention and reducing health care costs.

However, this option still has a limitation in that the retail price increase in the years after 2026 will only reach 4-5%/year, lower than the growth rate, not strong enough to maintain the stable impact of reducing purchasing power.

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With both of these options, the absolute tax rate by 2030 is 10,000 VND/pack, accounting for only 59.38% of the retail price.

According to experts' calculations, to achieve the tax rate recommended by the World Health Organization (WHO), the Ministry of Health proposes an absolute tax rate of VND15,000/pack (20 cigarettes/pack) by 2030, equivalent to 65% of the retail price, and a tax increase roadmap from 2026 to 2030 as follows: From 2026, it will be VND5,000/pack; from 2027, it will be VND7,500/pack; from 2028, it will be VND10,000/pack; from 2029, it will be VND12,500/pack and from 2030, it will be VND15,000/pack.

Regarding the advantages of the plan proposed by WHO and the Ministry of Health, according to Ms. Hai, it will help increase the tax rate on the retail price of cigarettes to the equivalent of 65%, close to WHO's recommendation.

At the same time, ensuring a high increase from the first year (2026) like the Ministry of Finance's option 2, while maintaining a retail price increase of about 8%/year throughout the 2026-2030 period, has a real impact on reducing purchasing power; helping to achieve national goals, thereby reducing the number of smokers and medical costs, while mobilizing more budget to serve sustainable socio-economic development goals.

Regarding the harmful effects of tobacco, according to Mr. Nguyen Trong Khoa, Deputy Director of the Department of Medical Examination and Treatment Management, Ministry of Health, the rate of lung cancer patients who smoke is 96.8% (according to research at K Hospital).

25 diseases related to tobacco use such as stroke, coronary artery disease, chronic obstructive pulmonary disease, lung cancer are the leading causes of death in Vietnam.

In addition, about 40,000 people die each year from tobacco-related diseases. WHO predicts that by 2030, this number will increase to more than 70,000 deaths each year if effective tobacco harm prevention measures are not implemented.

Deaths from non-communicable diseases account for 73% of all deaths from disease and injury in Vietnam. One of the important causes is the high rate of tobacco use.

In addition, the current amount spent on tobacco is about 49,000 billion VND/year (Estimated from total consumption in 2020). According to the preliminary estimate of the Vietnam Health Economics Association in 2022, the total cost related to medical examination and treatment, illness and premature death due to diseases related to tobacco use is 108,000 billion VND/year.

Regarding the use of e-cigarettes, according to Mr. Khoa, this situation is increasing rapidly. Specifically, the rate of e-cigarette use among students aged 13-15 has increased rapidly from 3.5% in 2022 to 8.0% in 2023.

This trend also appears in adults, the rate of e-cigarette use in this group also increased rapidly from 0.2% in 2015 to 3.6% in 2020.

In people over 15 years old: E-cigarette use is high in the younger age group (15 - 24 years old) with a rate of 7.3%. The age group of 25 - 44 years old is 3.2%. The age group of 45 - 64 years old is 1.4%.

The harmful effects of electronic cigarettes and heated tobacco products have been widely mentioned and communicated in the media. Among them, there are typical cases that have been reported by news agencies.

In 2022 and 2023, Bach Mai Hospital's Poison Control Center received nearly 130 cases of hospitalization due to poisoning after using e-cigarettes.

According to a summary of reports from nearly 700 medical examination and treatment facilities, in 2023 alone, there were 1,224 hospitalizations due to the use of e-cigarettes and heated tobacco products.

Symptoms at admission were mainly due to: allergy, poisoning, acute lung injury. Time of use, first use: 81 people and previous use: 1,143 people.

More information about the harmful effects of e-cigarettes, according to Dr. Nguyen Trung Nguyen, Director of the Poison Control Center, Bach Mai Hospital, cigarettes cause 28 different groups of diseases, especially cancer (typically lung cancer, 96.8% of people with lung cancer smoke);

Cardiovascular diseases (especially heart, coronary, and cerebrovascular diseases; respiratory diseases (especially respiratory tract infections and chronic obstructive pulmonary disease): 1.1 million people (2009); affect reproductive and sexual health in both sexes. Every year, about 70,000 Vietnamese people die from diseases caused by tobacco.

Source: https://baodautu.vn/de-xuat-phuong-an-lam-giam-so-nguoi-hut-thuoc-la-va-chi-phi-benh-tat-d227284.html