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Ministry proposes tobacco tax increase to VNĐ2,000

Ministry proposes tobacco tax increase to VNĐ2,000

HANOI: The Ministry of Health (MoH) on Thursday proposed to raise the tax on tobacco at a press conference on tobacco prevention hosted by the Ministry of Information and Communication.

According to the proposal, the tax imposed on a pack of cigarettes is expected to increase to VNĐ2,000 (US$0.088). Meanwhile, the draft law on Special Consumption Tax, which will come into effect in 2020, plans to put a tax of VNĐ1,000 ($0.044) on a pack of cigarettes or increase the tax from 75 to 80 per cent of the tobacco’s price from 2020 onwards and from 80 to 85 per cent from 2021 onwards.

Currently, tax on tobacco is 70 per cent of their prices.

The taxation policy aims to gain an additional tobacco tax revenue of VNĐ6,300 billion ($280 million) per year, decreasing the rate of male smokers by three per cent and reducing 300,000 early deaths caused by smoking.

Speaking at the conference, Phan Thị Hải, deputy director of the Tobacco Consequences Prevention Fund under MoH, said in 2015, Vietnamese people who smoked spent VNĐ31,000 billion ($1.4 billion) on tobacco, while the total treatment expense for smoking-related diseases was VNĐ24,000 billion ($1 billion).

According to a report of the World Health Organisation (WHO), 40,000 Vietnamese die of smoking-related diseases annually. The number is expected to go up to 70,000 in the coming years. Some 45.3 per cent men aged 15 and above are smokers, while 56 per cent start smoking before the age of 20, according to Phạm Thị Hoàng Anh, director of HealthBridge Canada Organisation in Việt Nam.

Experts believe the low price of tobacco products is the main cause leading to its widespread use.

In 2005-06, the per capita income in the country increased 4.7 times, but cigarette prices increased only 2.2 times.