Vietnam Hikes Sin Taxes
October 3, 2014 Taxation in Vietnam
HANOI – The government of Vietnam is looking to drastically lower the country’s consumption of beer and cigarettes by introducing steep incremental hikes on all such products.
Earlier this week the National Assembly Standing Committee of Vietnam announced that the taxes applied on the sale of tobacco, beer, wine and spirits will be raised at the start of 2016 in order to bolster the government’s tax collections and encourage national citizens to lead healthier lifestyles.
From January 1st 2016 the taxes applied to the sale of tobacco products will be raised from the current rate of 65 percent to 70 percent, and up to 75 percent in 2018.
The rate applied to the sale of beer will be raised from 50 percent by 5 percent per year from 2016 until 2018.
Wines with an alcohol rating below 20 percent will be hiked from 25 percent to 35 percent, while the rate applied to the sale of spirits will be realised from 50 percent to 65 percent.
The tax hike is expected to bring in as much as VND 7.7 trillion in 2018.
Vietnam currently has one of the highest consumption in age of cigarettes and alcohol, with the 15 million smokers in, and the third highest rate of beer consumption in Asia, after China and Japan.
Photo By: Curran Kelleher