The seminar "Special consumption tax (SCT) plan towards the goal of the National Strategy on tobacco harm prevention in Vietnam until 2030" was held by National Assembly Television in Hanoi on the morning of October 18.

Master - Doctor Nguyen Tuan Lam, an expert of the World Health Organization (WHO), noted that measures such as advertising bans, warnings, communication... have been implemented and are almost saturated, no longer very effective; only tax is the most effective measure to reduce tobacco use.

“According to international experience, tax increases account for 60% of the impact on reducing tobacco use. However, in Vietnam, the increase in tobacco tax has been too small, accounting for only 15-20% of the impact, leading to a high smoking rate,” said Mr. Lam.

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Dr. Nguyen Tuan Lam: "In Vietnam, the tax increase is too small, only accounting for 15-20% of the impact on reducing smoking." Photo: Binh Minh

According to the Draft Law on Special Consumption Tax (amended), tobacco products will maintain the tax rate of 75% and add an absolute tax rate according to the annual roadmap in the period from 2026-2030 with two options.

Option 1 adds 2,000 VND/cigarette pack in the first year and increases by 2,000 VND/pack in the following years to reach 10,000 VND/pack by 2030.

Latest statistics show that in Vietnam each year there are more than 100,000 deaths due to smoking, of which 84,500 are due to active smoking and 18,800 are due to passive smoking.

Option 2 applies an increase of VND5,000/bag from 2026, a progressive increase of VND1,000/bag in the next three years and VND2,000/bag in 2030 to reach VND10,000/bag in 2030.

Dr. Angela Pratt, WHO Representative in Vietnam, proposed that Vietnam should impose an absolute tax with a roadmap to reach VND15,000/pack by 2030, combined with the current tax rate, which will reduce the male smoking rate to 35.8% by 2030, achieving the national target of reducing smoking.

This will significantly increase annual tax revenue, bringing in an additional VND29.3 trillion per year to the budget by 2030, compared to 2020.

Ms. Hoang Thi Thu Huong, Specialist of the Legal Department - Ministry of Health, reviewed the history of tobacco tax increases: Vietnam first applied special consumption tax on tobacco in 1999, at a rate of 45%. In the period 2006-2007, the rate was 55%.

From 2008 to 2019, the special consumption tax on tobacco was increased three times: In 2008, the tax rate increased to 65%; in 2016 (after 8 years) it increased to 70%; in 2019 (after 3 years) it increased to 75%.

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Cigarette prices are becoming cheaper and more accessible as the average income of Vietnamese people increases. Photo: Binh Minh

“The tobacco tax increases are very low, and the time gap between tax increases is quite long, so it does not create enough impact to reduce purchasing power and consumption. Vietnam's per capita income continues to increase steadily every year, so tobacco prices are becoming cheaper and more accessible,” said Ms. Huong.

Ms. Le Thi Thu, an expert from the Campaign for Tobacco-Free Children in Vietnam, added: From 2006 to 2024, that is, in 18 years, the special consumption tax on cigarettes only increased by 20%, equivalent to an average increase of about 1.1%/year, while the annual economic growth is from 4-5%.

The draft Law on Special Consumption Tax (amended), which includes the content on special consumption tax on tobacco products, will be given its first opinion by the National Assembly at the 8th Session, opening on October 21, and is expected to be considered and approved at the Session in May 2025.

"This discussion aims to synthesize opinions and useful reference sources to help National Assembly deputies and policy makers make correct and accurate decisions to achieve all set goals," said journalist Le Quang Minh, General Director of Vietnam National Assembly Television.

The National Strategy on Tobacco Harm Prevention to 2030 issued by the Prime Minister on May 24, 2023 sets the goal of reducing the rate of tobacco use among men aged 15 and over to below 39% by 2025; and among women aged 15 and over to below 1.4%.

By 2030, reduce the rate of tobacco use among men aged 15 and over to below 36%; and among women aged 15 and over to below 1%.

At the same time, it is required to develop a roadmap to increase taxes on tobacco products, ensuring that by 2030, the tax rate reaches the proportion of retail prices as recommended by WHO; assign the Ministry of Finance to preside over and coordinate with the Ministry of Health and relevant ministries and branches to develop a roadmap to increase special consumption tax on tobacco products to achieve the strategy's goal of reducing tobacco use.