Vietnam's cigarette tax hike could see numbers of smokers drop, related illnesses decrease

September 17, 2014 5:46 am 

HO CHI MINH CITY, Sept. 16 — Vietnam's Ministry of Finance has made proposals to the under-discussion amendment on the Law on Special Consumption Tax to increase the consumption tax on cigarettes from 65 percent in 2014, to 75 percent in 2015, and 85 percent in 2018.

If approved, the new tax is expected to contribute more than 2.9 trillion VND (US$ 136.5 million) in taxes in 2015 and 7.7 trillion VND (US$ 362.4 million) in 2018.

While experts and healthcare activists said the proposal was too low and not strict enough to reduce consumption and combat trade fraud, domestic smokers argued the hike should be reviewed according to residents' average income.

The tax rate on the retail price of cigarettes in Vietnam currently stands at 41.6 percent.

To achieve the national strategy of reducing smoking from 47.4 percent to 39 percent of males in the population, the new tax must be 105 percent in July 2015 and 145 percent in 2018, according to the Ministry of Finance.

Nguyen Tuan Lam from the World Health Organization (WHO) said if the new tax could increase the price of cigarettes by 10 percent, the consumption level would be reduced by a mere five percent.

In its report in 2010, the Vietnamese Ministry of Health (MoH) revealed that 15 million Vietnamese people were smokers, and one in every four smokers were aged between 15 and 24 years old.

Insiders said one of the reasons why millions of Vietnamese could afford to smoke is because of the comparatively low tobacco tax rate, which was only higher than that of Cambodia compared with other ASEAN countries.

Vietnam imposed a 41.6 percent rate while that of Brunei was 81 percent, Singapore 71 percent and Thailand 70 percent, according to sources from the non-government organization HealthBridge Canada, in Vietnam.

Pham Thi Hong Anh, HealthBridge Canada's country director, told local media that the proposal of the Vietnamese Ministry of Finance to raise the rate from 65 percent to 75 percent will be ineffective, and the consumption power of these products will not change.

Meanwhile, MoH's Prevention and Control on Tobacco Harm Program said the experts' proposal was quite high, and this is echoed, in part, by domestic smokers.

Nguyen Can, 60, a retired construction worker in the Go Vap district of southern Ho Chi Minh City, told Xinhua that he has smoked cigarettes for more than 40 years and it is really hard for him to quit the habit.

"I know, smoking is very harmful to health, both of the smokers and people around, but I have gotten used to it for quite a long time and cannot quit. The only way that I can make it better is to reduce the amount of cigarettes I smoke every day," he said.

Can said he spends roughly 500,000 VND (US$ 25) per month on his smoking habit, which equals one-eighth of his monthly pension.

"If the tax will be doubled in a couple of years, I would not be able to afford to spend that much," he said, adding that even though, he supported the increase of cigarette consumption tax, as it might be an effective way to help him and other heavy smokers reduce smoking.

Vietnam has 15 million smokers and is one of 15 countries with the highest rate of cigarette smokers in the world at 48 percent for men and 1.4 percent for women, according to the WHO.

About 33 million non-smoking Vietnamese (out of the country's 90 million population as of November 2013) have to passively inhale smoking at home, and another 5 million people are affected by second-smoking in offices and public places.

Tobacco-related illnesses kill 40,000 people each year in Vietnam, and that figure is expected to rise to 70,000 per year by 2030, according to the Ministry of Health.

Cigarette smoking is the main cause of lung cancer.

Since mid-2013, Vietnam has enacted the Law on Prevention and Control of Tobacco Harm, which bans smoking in public places such as schools, hospitals and workplaces, among other regulations. (PNA/Xinhua)



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