As previously outlined, the Vietnamese government has proposed significant increases in taxes on alcohol, beer, and tobacco. (inside.beer, 14.6.2024). On the morning of November 22, National Assembly (NA) deputies held group discussions on the draft amendments to the Law on Corporate Income Tax and the Law on Special Consumption Tax during the ongoing second phase of the 8th session of the 15th National Assembly.
The implementation of the tax hikes, planned in phases from 2026 to 2030, aims to align with World Health Organization (WHO) recommendations for public health improvement and revenue generation. However, it is expected to have significant adverse impacts on the beer, beverage, and tobacco industries.
Under the proposed amendments, the excise tax rates for alcohol and beer will undergo significant annual increases beginning in 2026:
- Alcohol with ≥20% ABV: The current 65% tax rate will increase to 80% in 2026 and reach 100% by 2030.
- Alcohol with <20% ABV: Rates will rise incrementally from 35% to 70% by 2030.
- Beer: Excise taxes will match those for high-alcohol beverages, increasing from 65% to 80% in 2026 and 100% by 2030, representing an increase of more than 50% in four years.
The proposal is expected to raise retail prices by at least 10% annually, encouraging reduced consumption and helping mitigate health risks associated with alcohol abuse.
Deputy Prime Minister Le Thanh Long, presenting the draft law to the National Assembly, emphasized the importance of the tax increases in addressing public health concerns and meeting international standards. The Finance and Budget Committee has expressed support for the reforms, though some members propose differentiating beer tax rates from those of higher-proof alcoholic beverages based on their relative health risks.
Likewise, the recommendations include maintaining the current 75% excise tax rate on tobacco products put introducing a specific additional tax on tobacco, gradually increasing to up to VND 10,000 (USD 0.39) per pack by 2030. The aim is to reduce tobacco consumption among males aged 15 and older to below 36% by 2030, aligning with Vietnam’s National Strategy for Tobacco Harm Reduction.
The tax increases are part of Vietnam’s broader efforts to:
• Curtail consumption of harmful products.
• Reduce the public health burdens associated with smoking and excessive alcohol use.
• Boost government revenue for critical social welfare programs.
All proposals are currently under review, with further debates expected in the National Assembly before formal adoption.
