The biggest bottleneck in consumption
At the seminar "Anti-cigarette smuggling, current situation and legal corridor in the new situation" held on April 22, many experts assessed that consumption is the biggest bottleneck in the fight against cigarette smuggling.
In fact, after more than a decade of implementing Directive 30/CT-TTg of the Prime Minister on strengthening the fight against tobacco smuggling, the smuggling situation shows that with the involvement of functional forces including the customs sector, the situation of illegal tobacco transportation has been clearly curbed at many stages, especially in border areas. However, smuggled cigarettes have not been eliminated when they continue to "smuggle" into the domestic market through the retail system.
Mr. Le Duc Tuan - Deputy Head of Professional Staff Department, Anti-Smuggling Investigation Sub-Department (Customs Department) said that cigarette smuggling activities are still complicated on many routes. The Northern region is concentrated in areas such as Quang Ninh, Hanoi, Hai Phong, Lang Son, Lao Cai with main items being foreign cigarettes such as 555, Esse, Marlboro, Thunderbay, cigars, Chinese-language branded cigarettes and tobacco raw materials.
In the Central region, subjects use motorboats to transport along the Se Pon River, taking advantage of the dark night and complex terrain to bring goods into the Lao Bao area, then divide them into smaller portions, hide them or transport them by various means to bring them deeper into the inland.
Meanwhile, the Southwest border continues to be a hot spot with key areas such as Dong Nai, Dong Thap, Tay Ninh, An Giang, Quang Ngai and Ho Chi Minh City.
However, the results of combating smuggling are very commendable. During the implementation of Directive 30/CT-TTg, the Customs force discovered and arrested 1,663 violations, seized more than 23.3 million packs of cigarettes; prosecuted 12 cases and administratively fined more than 1.4 billion VND; destroyed more than 18.7 million packs of cigarettes.
These figures show great efforts in controlling supply from the border. However, according to Mr. Le Duc Tuan, smuggled cigarettes are no longer just a story of transportation but have taken root in the domestic market. "The small retail segment is the place that determines the output of smuggled goods, and is also the most difficult link to control today," Mr. Tuan emphasized.
The reason comes from the high demand for foreign cigarettes, while price differences due to high tax rates create attractive profits. In addition, in border areas, a part of people with low incomes and limited legal knowledge are easily attracted to participate in hired transportation.
Proposal to increase penalties
Faced with this situation, representatives of the Customs Department proposed to continue to strengthen inspections in key areas such as Lang Son, Quang Ninh, Cao Bang, Lao Cai, Hanoi, Ho Chi Minh City, Quang Tri, Long An, An Giang, Kien Giang, Dong Thap; and at the same time promote inter-sectoral coordination with the Police, Border Guard, Coast Guard, and Market Management.
In particular, the key solution is to strongly increase administrative penalties for illegal cigarette trading, especially at the retail stage, and implement it early in 2026 before the tax increase policy takes effect from 2027.
Speaking at the seminar, Ms. Phan Minh Thuy - Head of Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI), assessed that the gap between administrative and criminal penalties is still large. Specifically, the act of trading under 50 packs of smuggled cigarettes is only fined from 1 to 3 million VND, while the criminal handling threshold is from 1,500 packs or more or has the element of recidivism. This makes many subjects divide goods to avoid criminal handling.
From there, VCCI representatives proposed amending Decree 98/2020/ND-CP in the direction of increasing penalties, applying the principle that fines must be higher than expected profits, and at the same time, it is necessary to supplement a progressive penalty mechanism for recidivism and consider early transfer to criminal handling.
Sharing the same view, Ms. Le Thi Duyen Hai - Vice President cum General Secretary of the Vietnam Tax Consultants Association, said that smuggled cigarettes cause a budget loss of 5,000 to 6,000 billion VND each year, and seriously affect the legal domestic production industry. Therefore, it is necessary to increase the minimum fine to 10 times the current level to be sufficiently deterrent.
