Ho Chi Minh Times

Thursday, Nov 21, 2024

Experts Urge Careful Study of Proposed Alcohol Tax Increase in Vietnam

Balancing public health goals with economic recovery remains a challenge
Hanoi economists and industry experts have called for in-depth studies on the impact of a proposed tax hike on alcoholic beverages, set to double from 2026 to 2030 under Vietnam's revised special consumption tax law. Speaking at a Vietnam Economic Association (VEA) conference, Professor Chử Văn Lâm stressed the need for comprehensive analysis to understand the short, medium, and long-term effects on the industry.

While the government aims to improve public health and expand tax revenue, concerns remain about the potential strain on an industry still recovering from the pandemic and rising logistics costs. Experts warned of unintended consequences, such as increased smuggling and counterfeiting, which could hurt state revenue and public safety.

Industry representatives suggested delaying the tax increase until 2027 and capping it at 80 percent by 2031 to allow businesses time to adapt. Economists also proposed tying tax rates to CPI to ensure fairness and drawing lessons from countries that adjusted similar tax policies after negative economic impacts.

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