The World Health Organization estimates that the global economic loss caused by tobacco is 1,400 billion USD each year. In Vietnam, according to a preliminary estimate by 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 per year (equivalent to 1.14% of GDP in 2022). This figure is 5 times larger than the contribution of tobacco tax revenue to the national budget.
The above information was given at a training session to improve communication capacity organized by the Ministry of Information and Communications in coordination with the Tobacco Harm Prevention Fund and the Ministry of Health on November 21.
Faced with the enormous impacts of tobacco on health and the economy, Dr. Phan Thi Hai, Deputy Director of the Tobacco Harm Prevention Fund - Ministry of Health, proposed: "We must increase the special consumption tax on tobacco in Vietnam, build a high enough tax rate, continuously to have the meaning of gradually reducing tobacco use."
According to Ms. Hai, from 2019 to present (According to the Law on Special Consumption Tax), Vietnam is currently applying the special consumption tax rate (SCT) at a rate of 75% and the taxable price is the factory price.
Dr. Hai cited: "The price of a pack of the most popular brand of cigarettes in Vietnam is only about 0.9 USD/pack, the price of cigarettes in Vietnam ranks 15th, almost the lowest, among 19 countries in the Western Pacific region. With such a low retail price, cigarettes are very accessible to low-income people, children and adolescents.
The proportion of tobacco tax calculated on retail price (including special consumption tax and value added tax) is only between 36.7-38.8%. This ratio is much lower than the average of middle-income countries (59%), lower than most ASEAN countries (Thailand 81.3%, Indonesia 63.5%, Singapore 67.5%, Malaysia 51.6%).
Sharing the same view, Dr. Nguyen Tuan Lam - WHO's tobacco harm prevention expert also said that increasing the special consumption tax on tobacco at a high level is extremely necessary. Increasing tobacco tax at a high enough level to reduce consumption, implemented as soon as possible, will help save many lives and reduce economic and social losses.
To effectively reduce tobacco consumption, the World Health Organization recommends: Adding a specific tax (to switch to a mixed tax system) at a sufficiently high level and increasing the tax in a regular manner so that tobacco prices keep up with income growth and gradually move towards the optimal tax rate of 75% of the retail price to contribute to the goal of reducing tobacco use.
