Vietnam is set to introduce a significant new absolute excise tax on cigarettes beginning in 2027, part of a long-term strategy to combat the country’s high smoking rates.
The new levy will start at 2,000 dong per pack and gradually increase to 10,000 dong ($0.38) by 2031, supplementing the existing tax structure in a bid to make tobacco less affordable for the growing population.
Okay News reports that the amended Special Consumption Tax law will adopt a “mixed tax regime,” combining the current 75% base rate with the new absolute levy.
Phan Thi Hai, deputy director of the Tobacco Harm Prevention Fund, admitted that previous tax measures between 2012 and 2025 were too low to reduce consumption, especially as per capita income in Vietnam has steadily risen.
Currently, the tax burden on tobacco in Vietnam stands at just 36.8% of the retail price—far below the World Health Organization’s recommended 70-75% and significantly lower than regional neighbors like Thailand (78.6%) and Singapore (67.1%).
The urgency of the move is underscored by grim statistics: Vietnam recorded over 15 million smokers in 2024, ranking it among the world’s top tobacco-consuming nations. Health officials estimate that smoking contributes to approximately 100,000 deaths annually in the country. To further tighten control, the health ministry has proposed additional reforms, including expanding smoke-free zones, restricting retail access for youth, and increasing health warnings to cover 85% of cigarette packaging.
