On the morning of November 22, Deputy Prime Minister Le Thanh Long presented to the National Assembly a summary report on the draft revised Law on Special Consumption Tax.

According to the draft law on tobacco products as prescribed in the Law on Prevention and Control of Tobacco Harms, the tax rate of 75% will be maintained and an absolute tax rate will be added according to the annual increase schedule in the period from 2026-2030.

The goal of the regulation is to contribute to achieving the target of reducing the rate of tobacco use among men aged 15 and over to below 36% in the 2026-2030 period according to the National Strategy on Prevention and Control of Tobacco Harms and towards achieving the tax ratio on retail price of tobacco as recommended by the World Health Organization.

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Deputy Prime Minister Le Thanh Long presents the draft law. Photo: National Assembly

With tobacco, the Government proposes two options.

Option 1: For cigarettes: 2,000 VND/pack (from 2026), 4,000 VND/pack (from 2027), 6,000 VND/pack (from 2028), 8,000 VND/pack (from 2029), 10,000 VND/pack (from 2030).

For cigars: VND 20,000/cigar (from 2026), VND 40,000/cigar (from 2027), VND 60,000/cigar (from 2028), VND 80,000/cigar (from 2029), VND 100,000/cigar (from 2030).

For shredded tobacco, pipe tobacco or other forms used for smoking, inhaling, chewing, sniffing or sucking: VND 20,000/100g or 100ml (from 2026), VND 40,000/100g or 100ml (from 2027), VND 60,000/100g or 100ml (from 2028), VND 80,000/100g or 100ml (from 2029), VND 100,000/100g or 100ml (from 2030).

Option 2: For cigarettes: VND 5,000/pack (from 2026), VND 6,000/pack (from 2027), VND 7,000/pack (from 2028), VND 8,000/pack (from 2029), VND 10,000/pack (from 2030).

For cigars: VND 50,000/cigar (from 2026), VND 60,000/cigar (from 2027), VND 70,000/cigar (from 2028), VND 80,000/cigar (from 2029), VND 100,000/cigar (from 2030).

For shredded tobacco, pipe tobacco or other forms used for smoking, inhaling, chewing, sniffing or sucking: VND 50,000/100g or 100ml (from 2026), VND 60,000/100g or 100ml (from 2027), VND 70,000/100g or 100ml (from 2028), VND 80,000/100g or 100ml (from 2029), VND 100,000/100g or 100ml (from 2030).

The government is leaning towards option 2 because the price of cigarettes in Vietnam is getting cheaper compared to income while the burden of medical costs related to diseases caused by cigarettes is very high. In addition, it also helps reduce cigarette consumption, thereby reaching the goal of reducing the rate of tobacco use among men aged 15 and over...

The examining body, the National Assembly's Finance and Budget Committee, also agreed with option 2 to contribute to increasing the effectiveness of the policy in consumer orientation and in line with tax reform trends in other countries.

For alcohol and beer, the draft law stipulates a tax rate in percentages that will increase gradually each year from 2026 to 2030 to achieve the goal of increasing the selling price of alcohol and beer by at least 10% according to the World Health Organization's tax increase recommendation. The draft law proposes two options.

For alcohol products with an alcohol content of 20 degrees or higher, the Government is leaning towards increasing the tax rate from the current level of 65% to 80%, 85%, 90%, 95%, 100% each year in the period from 2026-2030.

For alcohol products under 20 degrees, the Government is leaning towards increasing the tax rate from the current level of 35% to 50%, 55%, 60%, 65%, 70% each year in the period from 2026-2030.

For beer, the Government is leaning towards increasing the tax rate from the current level of 65% to 80%, 85%, 90%, 95%, 100% each year in the period from 2026-2030.

Option 2 would have a stronger effect on reducing the affordability of alcohol products, and would have a better impact on reducing alcohol consumption and related harms caused by alcohol abuse.

Presenting the review, the leader of the Finance and Budget Committee said that most opinions agreed with the tax increase as option 2, some opinions suggested considering the calculation and proposing a reasonable increase to be able to achieve the set goals.

Some people say that setting the tax rate on beer equal to the tax rate on alcohol over 20 degrees is not really appropriate because the harmful effects of alcohol or beer depend mainly on the alcohol concentration.

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The National Assembly Standing Committee agreed to assign the Government to prescribe the annual revenue threshold that is not subject to VAT.
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