Ministries propose 10% tax hike for alcoholic beverages

Their proposal is part of amendments to the Law on Excise Tax, which is expected to be submitted to the National Assembly in October and passed in May next year.

The tax rates are currently 65% for beer and 35-65% for other liquors, depending on the alcohol content.

WHO has recommended increasing them by at least 10%, noting that in Vietnam the taxes only make up 30% of retail prices.

In comparison, excise tax rates range from 40% to 85% in other countries, it said.

To address this disparity, the Ministry of Finance has proposed two options for raising alcohol taxes. The first option suggests a 2-3% increase in 2026, with annual adjustments thereafter to match inflation and income growth. The second option proposes a 10% increase in 2026, followed by annual increases of 2-3% in subsequent years.

The ministry favors the second option, believing it would more effectively reduce alcohol consumption by curbing purchasing power.

At a Friday conference on hiking excise tax for alcohol, cigarette and sugary drinks, Hoang Thi Thu Huong, a representative from the Ministry of Health, also supported this approach.

Huong said despite excise tax hikes between 2016 and 2018, purchasing power for alcoholic beverages remains high due to rapid income growth outpacing price increases.