Dr. Nguyen Huy Quang, Head of the Advisory, Critical and Social Assessment Department of the Vietnam Medical Association, gave the above information at the online seminar with the theme "Increasing tobacco taxes - double benefits for the budget and health" organized by Dan Tri newspaper on June 5.
According to Dr. Quang, if we increase tax quickly and increase as the Ministry of Health proposes to reduce the rate of smoking, reducing 2.5 million smokers, increasing the revenue of the budget, the plan to increase from 2026 should be implemented. The earlier the benefits as soon as possible, the longer the effect is reduced.
In previous drafts, the Government proposed to the National Assembly 2 options: Option 1 is to increase to VND 2,000/bag in 2026, and increase to VND 2,000/bag each year in the following years, and increase to VND 10,000/bag in 2030.
Option 2 is to increase the starting price by 5,000 VND: With such an increase, it has not met expectations, the national strategic target of tobacco harm prevention has only reached more than 37%. Therefore, the World Health Organization (WHO) and the Ministry of Health proposed to increase by 5,000 VND and then increase it further so that by 2030, the price of a pack of cigarettes will be 15,000 VND to meet expectations as set out in the strategy.
The new plan is extended to 2027, increasing the starting price by VND 2,000/pack, and increasing to VND 10,000/pack by 2031. This can be done more slowly, the slower the more the smoking rate of newcomers starts, the more harmful it is to the economy and society.
Such a roadmap affects economic growth, including the set target, the expectation with the old plan is only over 37%, far behind the target set by the Government.
Currently, Vietnam has more than 15 million smokers, the smoking rate among adult men exceeds 41%. Every year, more than 103,000 people die from tobacco-related diseases, of which nearly 19,000 die from exposure to secondhand smoke. This situation requires stronger intervention solutions, especially in tax policies.
Associate Professor, Dr. Nguyen Anh Tri, National Assembly Delegate of the Hanoi Delegation, emphasized: According to WHO's recommendations, tobacco tax is the fastest and most cost-effective measure to reduce tobacco consumption, thereby reducing premature mortality and disease burden. The WHO proposes a tax rate of at least 75% of retail price for highest efficiency. He also proposed a roadmap for applying absolute tax from 2027, with a starting price of VND 5,000/bag (20 cigarettes), gradually increasing by VND 3,000 per year to reach VND 15,000/bag by 2031.
Dr. Nguyen Huy Quang shared his opinion: "Compared to other countries in the ASEAN region, Vietnam is currently applying a rather low tobacco tax rate. The strong and regular increase in tobacco taxes is a policy that countries around the world consider a winning policy - both protecting public health and increasing revenue for the State budget."
Expert Sarah Bales, from the Vietnam Association of Health Economics, emphasized that: Vietnam is facing a major turning point in improving public health. The application of absolute tax from VND 5,000/bag in 2026 and gradually increasing to VND 15,000 in 2030, combined with a tax rate of 75%, is a sustainable direction to achieve the National Strategy target by 2030".
According to estimates, tobacco use causes Vietnam to lose more than VND108,000 billion per year, equivalent to 1.14% of GDP. This total economic damage is 5 times higher than the budget revenue from tobacco taxes. That shows that when the tax rate is still low, the state budget does not collect much while society has to bear heavy financial consequences.
According to WHO and the World Bank, price and tax policies are the most effective tools to reduce tobacco consumption, accounting for up to 50% of the effectiveness in reducing smoking rates, especially among adolescents. However, the special consumption tax on tobacco in Vietnam is still low.
