Vietnam loses US$300 million a year due to tobacco smuggling

Contraband tobacco results in a loss of VND7 trillion (US$309 million) for Vietnam’s state budget, Nguyen Dinh Truong, head of the Tobacco Economic Technical Institute has said at a recent meeting.

Vietnam ranked second in Asia in terms of tobacco smuggling, according to a survey conducted by Oxford's Economics Department and the US-based International Tax and Investment Center in 2014.

The survey revealed that smuggled tobacco accounted for around 20% of all sales, with 60 million packs of cigarettes being imported into Vietnam over the 2012-2014 period.

vietnam loses us$300 million a year due to tobacco smuggling hinh 0
Photo: VNS

Smuggled tobacco is reportedly transported through border gates with Laos and Cambodia to reach key markets of Ho Chi Minh City and five other southern provinces.

Vietnam’s anti-smuggling forces said that within 20 first days of July this year, they caught three cases of contraband cigarettes from Cambodia, seizing a total of 130,000 packs.

Profit is the main driving force behind tobacco smuggling. Legally imported cigarettes are imposed a tariff of 230%.

Nguyen Thanh Toan, head of the Customs Department of Dong Thap Province, said that smuggling rings are getting more clever.

“There are too many unemployed people ready to help transport illegal cigarettes despite the risks,” Pham Kien Nghiep, general secretary of the Tobacco Association told the Vietnam News Agency.

Nghiep added that amendments in the Penal Code last year caused difficulties in fighting tobacco smuggling. Previously smuggling 1,500 packs could lead to criminal charges but then it was adjusted up to 6,500 packs.

The cap should be lowered, the association said.

Deputy Minister Truong Hoa Binh said to help end smuggling activities, local people living near border gates need to have better access to jobs so that they don't turn to illegal business.


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