Vietnam to Implement Cigarette Excise Tax from 2027, Gradual Hike to Follow
Vietnam will implement absolute excise tax on cigarettes from 2027, rising incrementally to 10,000 dong per pack by 2031. The mixed tax regime combines existing 75% base rate with progressive absolute levy starting at 2,000 dong per pack. Current tax burden at 36.8% of retail prices falls well below WHO recommendations of 70-75% and regional standards. Additional measures include expanded smoke-free areas and enlarged health warnings covering 85% of packets.
*this image is generated using AI for illustrative purposes only.
Vietnam will introduce an absolute excise tax on cigarettes starting in 2027, with rates increasing incrementally to 10,000 dong ($0.38) per pack by 2031 as part of a comprehensive campaign to curb smoking, according to state media reports.
New Tax Structure Implementation
The amended Special Consumption Tax law, passed last year, will adopt a mixed tax regime starting from 2027. This new structure combines the existing 75% base rate with an absolute levy that will be implemented progressively over four years.
| Parameter: | Details |
|---|---|
| Implementation Start: | 2027 |
| Initial Absolute Tax: | 2,000 dong per pack |
| Final Tax Rate (2031): | 10,000 dong per pack |
| Current Base Rate: | 75% |
"The tax on tobacco for the 2012-2025 period is very low and had no impact on reducing consumption, while Vietnam's per capita income has steadily increased every year," stated Phan Thi Hai, deputy director of the Tobacco Harm Prevention Fund, as quoted by Suc Khoe Doi Song, the official newspaper of the health ministry.
Current Tax Burden Analysis
Vietnam has raised tobacco taxes twice since 2013, but officials indicate these increases have had minimal impact on smoking rates. The health ministry reported significant gaps in the current tax structure compared to international standards and regional peers.
| Country/Standard: | Tax Burden (% of retail price) |
|---|---|
| Vietnam (Current): | 36.8% |
| WHO Recommendation: | 70-75% |
| Thailand: | 78.6% |
| Singapore: | 67.1% |
The current tax burden on tobacco represents only 36.8% of retail prices, substantially below the 70-75% level recommended by the World Health Organisation and significantly lower than rates in neighboring ASEAN countries.
Additional Regulatory Measures
The health ministry proposed further changes to the Tobacco Harm Prevention Law on Tuesday, introducing comprehensive measures to restrict tobacco access and usage:
- Expansion of smoke-free areas
- Tightening of retail restrictions
- Enlarging health warnings to cover 85% of cigarette packets
- Imposing advertising and marketing bans to restrict youth access
Public Health Impact
Vietnam faces significant health challenges related to tobacco consumption. Health officials estimate approximately 100,000 deaths occur annually as a direct or indirect result of smoking. The health ministry reported that Vietnam had more than 15 million smokers in 2024, ranking it among the world's top tobacco-consuming countries.
The ministry identified the affordability of cigarettes as a significant barrier to reducing tobacco use, particularly among men, highlighting the importance of the upcoming tax reforms in addressing this public health concern.
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