Ministry proposes tobacco tax increase to VND2,000

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

ministry proposes tobacco tax increase to vnd2,000 hinh 0

According to the proposal, the tax imposed on a pack of cigarettes is expected to increase to VND2,000 (US$0.088).

Meanwhile, the draft law on Special Consumption Tax, which will come into effect in 2020, plans to put a tax of VND1,000 (US$0.044) on a pack of cigarettes or increase the tax from 75 to 80% of the tobacco’s price from 2020 onwards and from 80 to 85% from 2021 onwards.

Currently, tax on tobacco is 70% of their prices.

The taxation policy aims to gain an additional tobacco tax revenue of VNĐ6,300 billion (US$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 Thi Hai, deputy director of the Tobacco Consequences Prevention Fund under MoH, said in 2015, Vietnamese people who smoked spent VND31,000 billion (US$1.4 billion) on tobacco, while the total treatment expense for smoking-related diseases was VND24,000 billion (US$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% men aged 15 and above are smokers, while 56% start smoking before the age of 20, according to Pham Thi Hoang Anh, director of HealthBridge Canada Organisation in Vietnam.

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.

Nguyen Tuan Lam, a WHO representative in Vietnam, told the Vietnam News Agency that the percentage of tobacco tax on retail price in Vietnam (35.6%) was much lower than the world average (56%) and other countries in ASEAN, Thailand (73%) and Singapore (66%).

“A tax increase of 10% is estimated to reduce tobacco consumption by four per cent in developed countries and by five per cent in developing countries. It will also contribute to reducing the smoking rate among the poor and the young,” Lam said. 

By increasing tax to VND5,000 (US$0.22) per cigarette pack, Vietnam can stop 1.8 million people from smoking, prevent 900,000 smoking-related early deaths and get VND10,700 billion (US$470 million) in the State budget.

Many studies have indicated that the smoke from a cigarette contains more than 4,000 chemicals, of which over 200 are toxic and additives, especially nicotine.

In April, Tobacco Consequences Prevention Fund, in collaboration with Vital Strategies, an international healthcare organisation, launched a mass media campaign on the harmful effects of tobacco consumption and its prevention.

VNS

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