Ministry proposes hiking taxes on alcohol, cigarettes to cut consumption

Tuesday, Feb 11, 2014 08:35

An alcohol shop on Ha Noi's Ba Trieu Street. Taxes on alcoholic beverages and cigarettes could be increased by 15-30 percentage points in mid-2015. — VNA/VNS Photo Tran Viet

HCM CITY (Biz Hub)— Special consumption tax on alcoholic beverages and cigarettes is likely to increase by 15-30 percentage points in mid-2015, with the Ministry of Finance making a proposal to the effect to the Government as part of efforts to reduce their consumption.

It seeks to increase the tax on cigarettes to 75 per cent from the current 65 per cent. It will go up by another 10 per cent in early 2018.

According to the ministry, the higher tax is expected to contribute an additional VND2.93 trillion (US$139.5 million) in revenues in 2016 and VND7.7 trillion ($367 million)in 2018.

The SCT on beer and liquor will increase to 65 per cent from the current 50 per cent, contributing an additional VND7.8 trillion ($371 million) and VND389 billion ($18.5 million) respectively.

The ministry blamed alcohol consumption for not only affecting people's health but also causing some serious social problems like violence, social disorder, crime, and accidents.

Viet Nam is the third largest per-capita consumer of beer in Asia behind only China and Japan.

Last year the country consumed three billion litres, or 32 litres per person.

The smoking rate too is high, with around 15 million people lighting up and also making millions of others, including women and children, passive smokers. Cigarettes killed 40,000 people in 2008, and the ministry expects the number to rise to 50,000 by 2023.

In early 2010 an SCT of 45 percent was slapped on wine and beer, and this was increased to 50 percent last year.

During the last decade Viet Nam's liquor and beer industries grew strongly despite the global recession and played an important part in the country's industrial development.

They plan to produce 4.7 billion litres and 540 million litres of liquor next year. — VNS

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