Apply special consumption tax on tobacco to reduce disease burden

According to the latest plan, the World Health Organization (WHO) and the Ministry of Health propose to add an absolute tax on tobacco products at a rate of at least VND5,000/pack, then increase it, so that by 2030 the tax on a pack of cigarettes will be VND15,000. The tax increase on tobacco products needs to be increased immediately, strongly and regularly, and special consumption tax should be applied to this product from 2026 to curb millions of people from turning to tobacco.

That was the proposal of many experts attending the online discussion: "Increasing tobacco tax - dual benefits for the budget and health" organized by Dan Tri Newspaper on June 5, in Hanoi .

The seminar was held in the context of the Law on Special Consumption Tax (amended) expected to be discussed by the National Assembly at the second phase of the 9th session.

Young people easily access cigarettes because they are cheap.

Mr. Nguyen Huy Quang - Head of the Consulting, Criticism and Social Appraisal Department (Vietnam Medical Association) said that Vietnam is in the top 5 countries with the lowest tobacco tax among 19 countries in the Western Pacific region. This is the leading reason why the smoking rate among adult men is exceeding 40%.

In previous drafts, the Government presented two options to the National Assembly. Option 1 is to increase to 2,000 VND/bag in 2026, and increase by 2,000 VND/bag each year in the following years, so that it increases to 10,000 VND/bag in 2030. Option 2 is to increase the starting price by 5,000 VND.

With the above increase, it has not met the expectation, the target of the national strategy to prevent the harmful effects of tobacco has only reached more than 37%. Therefore, WHO and the Ministry of Health proposed to increase by 5,000 VND and then increase further so that by 2030, the price of a pack of cigarettes will be 15,000 VND to meet the expectation as set out in the strategy.

“With the new plan to delay the tax increase on cigarettes until 2027, starting at 2,000 VND/pack, and increasing to 10,000 VND/pack by 2031, the slower this is, the faster the rate of new smokers will start smoking, and the more harmful it will be to the economy and society,” Mr. Quang pointed out.

Dr. Nguyen Huy Quang emphasized that WHO recommends that retail prices must reach a tax rate of 75%, but Vietnam currently only reaches about 38%, which is very low. Compared to ASEAN countries, Vietnam's rate and retail prices are also low: Thailand is 78%, Indonesia is 63% and cigarette prices in these countries are much higher than in Vietnam.

Mr. Quang said that cigarettes in Vietnam are currently very cheap, a normal pack costs only about 10,000 VND, commonly 7,000 - 8,000 VND, only 1/4 of a bowl of pho. With such a cheap price, cigarettes are very accessible, especially to teenagers and the poor.

Professor Nguyen Anh Tri - National Assembly Delegate of Hanoi Delegation. (Photo: PV/Vietnam+)

Professor Nguyen Anh Tri - National Assembly Delegate of Hanoi Delegation expressed the view that Vietnam needs to impose absolute tax on cigarettes according to the level proposed by the World Health Organization, at least 75% of the retail price and gradually increase to reach the tax rate of 15,000 VND/pack by 2031.

“I agree with the Ministry of Health’s view that tobacco taxes should be increased immediately, strongly and regularly and that special consumption tax should be applied to this product. If this can be implemented from 2026, when the time is ripe, this will be a very good step forward. Increasing tobacco taxes high and regularly is considered by countries around the world as a win-win policy, a win in protecting health and a win in increasing revenue for the State budget...,” Professor Nguyen Anh Tri analyzed.

3 types of costs due to the consequences of tobacco

According to health sector statistics, each year more than 100,000 Vietnamese people die from tobacco-related diseases, of which nearly 19,000 deaths are due to exposure to secondhand smoke.

Ms. Sarah Bales - Expert of the Vietnam Health Economics Association cited a study, based on analysis by the Social Insurance Agency, showing that 6% of hospitalizations and 8% of outpatient visits were attributed to tobacco. This is a huge burden on medical examination and treatment.

Ms. Sarah Bales - Expert of Vietnam Health Economics Association. (Photo: PV/Vietnam+)

According to Ms. Sarah Bales, studying the costs caused by tobacco, there are 3 types of costs. The first is the cost of medical examination and treatment paid by health insurance or people. Every year, about 8,500 billion VND of health insurance is spent on medical facilities to treat diseases caused by tobacco. In addition, there is money that people contribute out of their own pocket to buy medicine and medical examination and treatment, and the total of both amounts is about 16,400 billion VND.

Second, when sick, workers have to take time off work. Not only the sick person but also their relatives have to go along to take care of them. Every year, it is estimated that about 21.8 million working days are lost to medical treatment, causing a loss of about 9,000 billion VND.

Third is the cost of premature death, that is, death before the age of 40. Because smokers can continue to work until the age of 60. The estimated economic loss due to premature death is more than 60,000 billion VND.

“However, this study only calculated a low level compared to reality. Therefore, it is necessary to increase tobacco taxes immediately, strongly and regularly, and apply special consumption tax on this item from 2026 to control millions of people who turn to tobacco,” Ms. Sarah Bales emphasized.

Information presented at the Seminar shows that cigarettes are easily accessible to young people, largely due to their low prices. From 2022-2023, total cigarette production in Vietnam increased by more than 10%. Studies estimate that tobacco use causes Vietnam to lose more than VND108,000 billion each year, equivalent to 1.14% of GDP. This total economic loss is 5 times higher than the budget revenue from tobacco taxes./.

(Vietnam+)

Source: https://www.vietnamplus.vn/app-dung-thue-tieu-thu-dac-biet-voi-thuoc-la-de-giam-nhung-ganh-nang-benh-tat-post1042588.vnp