The World Bank has recommended that Vietnam adopt a 155 percent special consumption tax on alcoholic beverages, warning that the country’s rising alcohol-related deaths and illnesses are becoming a public health concern.
In a consultancy report, the organization suggested that Vietnam’s Ministry of Finance implement an additional tax of VND 16,500 (USD 0.65) per liter of alcohol on top of the current 65 percent tax per product.
The report highlighted that alcohol-related deaths in Vietnam are now 140 percent higher than the average in lower-middle-income countries—a stark contrast to 1990 when Vietnam’s figure was 59 percent below average.
Data from the World Bank further reveals that alcohol consumption in Vietnam surged by 177 percent between 2008 and 2022, despite a previous tax increase on beer from 45 percent to 65 percent. This suggests that the earlier tax hikes were insufficient to significantly curb alcohol consumption, the report added.
However, the Ministry of Finance has expressed reservations about the World Bank’s recommendation, arguing that such a high tax rate may not be suitable for Vietnam at this time.
Instead, on 14 June, the ministry submitted a draft law to the government proposing more gradual amendments to the excise tax on alcohol, sugary drinks, and tobacco. These amendments are part of Vietnam’s broader strategy to promote healthier lifestyles, as outlined in the National Nutrition Strategy for 2021-2030 and the National Plan for the prevention and control of non-communicable diseases and mental disorders for 2022-2025.
The ministry’s proposal suggests increasing the special consumption tax on wine with an alcohol content of 20 percent or more from the current 65 percent to 90 percent or 100 percent by 2026-2030.
For wines with lower alcohol content, the tax would rise from 35 up to 70 percent, and the tax on beer would increase from 65 to 90 or 100 percent. The ministry estimates these changes could boost government revenues by VND 10.7 trillion (USD 424.3 million) annually.
Despite these proposals, the World Bank has criticized the gradual approach as inadequate for significantly reducing alcohol consumption, highlighting the need for more aggressive measures to address Vietnam’s rising alcohol-related health issues.
