Government of Viet Nam Approves Life-Saving Taxes on Tobacco and Sugar-sweetened Beverages

Washington, D.C. –  The National Assembly of Viet Nam has taken a critical step for public health by passing amendments to the Excise Tax Law that raise taxes on tobacco products and introduce an excise tax on sugar-sweetened beverages, an innovative step in the country’s tax policy that will save lives and generate revenue.

According to estimates from the World Health Organization the resulting price increases will reduce the number of smokers in Viet Nam by 2.2 million by 2030, saving thousands of lives as well as significant health care and other economic costs currently borne by consumers, businesses, and the government.

For the first time, Viet Nam will shift from an ad valorem system to a mixed tobacco tax structure. The new tax on tobacco will be 75% ad valorem tax plus a specific tax starting with VND 2,000 per pack of cigarettes in 2027 and increasing annually to VND 10,000 per pack by 2031. The annual increase is meant to prevent erosion of impact due to inflation. The initial increase is projected to raise cigarette retail prices by 16% in the first year.

The law also introduces the country’s first excise tax on sugar-sweetened beverages, a policy proven to help curb consumption of these unhealthy products. The policy introduces an 8% excise tax on sugar-sweetened beverages, defined as products with sugar content exceeding 5g per 100ml, starting in 2027, rising to 10% in 2028. This measure is a step to address the country’s rising rates of obesity and diet-related non-communicable diseases, particularly among children and adolescents, and it opens the pathway to continue strengthening tax rates on sugar-sweetened beverages. 

Economic and health modeling from WHO shows that the new tobacco taxes will generate about an additional 44,500 billion VND - around 1.78 billion USD - from 2026 to 2030 in government revenue. The revenue generated can support healthcare and other essential programs to improve the health of Vietnamese people.

These amendments are a model of innovative fiscal policy focused on saving lives and reducing premature death and illness. Raising taxes on harmful products to make them less affordable is one of the most effective public health interventions, and by targeting both tobacco and sugar-sweetened beverages Viet Nam is taking a bold step to reduce non-communicable diseases and protect future generations.

The Campaign for Tobacco-Free Kids applauds the Government of Viet Nam for its bold, visionary leadership. We also recognize that this new policy reflects the tireless efforts of policymakers and public health advocates who have championed measures to protect public health and save lives. This achievement is meaningful progress toward building a healthier future for Viet Nam.