Vietnam: Government presents proposal to increase taxes on beer, alcohol, tobacco from 2026 to 2030

The Vietnamese government has presented a proposal to the National Assembly to amend the Special Consumption Tax Law, targeting higher taxes on alcohol, beer, and tobacco through a phased approach from 2026 to 2030, VietNamNet reported on November 22.

Under the proposal, the current 75% excise tax rate on tobacco products will remain, but an additional specific tax will be gradually implemented.

The aim is to reduce tobacco consumption among males aged 15 and older to below 36% by 2030, in line with Vietnam’s National Strategy for Tobacco Harm Reduction. This adjustment also seeks to increase the proportion of tax on retail prices to meet WHO recommendations.

Two proposed scenarios:

Scenario 1: Incremental specific taxes starting at 2,000 VND per pack in 2026, rising annually to 10,000 VND per pack by 2030. Taxes on cigars and other tobacco products follow a similar escalation.

Scenario 2: Higher initial rates, starting at 5,000 VND per pack in 2026 and gradually increasing to 10,000 VND per pack by 2030. This scenario also includes steeper taxes for cigars and other tobacco products.

The government favors Scenario 2 due to its stronger potential to reduce tobacco affordability and curb consumption. The National Assembly’s Finance and Budget Committee supports this scenario for its alignment with global tax reform trends and its ability to influence consumer behavior effectively.

The draft law outlines percentage-based tax rate increases for alcohol and beer, phased annually from 2026 to 2030.

Proposed changes:

Alcohol ≥20% ABV: Incremental increases from the current 65% rate to 80% in 2026, rising to 100% by 2030.
Alcohol <20% ABV: Incremental increases from 35% to 70% by 2030.
Beer: Matching increases to 80% in 2026, reaching 100% by 2030.

The government’s preference for this approach aims to raise retail prices by at least 10% annually, consistent with WHO recommendations to reduce alcohol consumption and mitigate related harms.

While the Finance and Budget Committee largely supports the proposed tax hikes, some members suggest tailoring beer tax rates differently from those for high-proof alcohol, emphasizing that the harm caused by these beverages depends primarily on alcohol content.

The proposed tax reforms aim to:

Reduce the consumption of harmful products.
Mitigate public health burdens caused by smoking and alcohol abuse.
Increase government revenue for social welfare programs.

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