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Vietnam's cheap cigarettes make it easier to smoke, harder to discourage the habit

By Le Nga   November 24, 2022 | 05:47 am PT
Vietnam's cheap cigarettes make it easier to smoke, harder to discourage the habit
An astray of cigarette butts. Photo by VnExpress/Thanh Nguyen
The average price of a cigarette pack in Vietnam is a third of the world’s and among the world’s lowest, a factor in the nation’s high smoking rate, experts say.

Dao The Son, an economist and instructor at the Vietnam Commercial University in Hanoi, said Wednesday that the price of cigarettes in Vietnam was roughly the same as in Cambodia and Laos, and much lower than in Singapore, Malaysia and other countries in the region.

"Cheap cigarettes make them more accessible and affordable for young and poor people in Vietnam," he said, adding that this was a main factor behind Vietnam’s high smoking rate.

The fact that the smoking rate is falling slowly is due to the low taxes on tobacco products, he added.

A 2021 report on tobacco taxes by the Southeast Asia Tobacco Control Alliance (SEATCA) said tobacco prices in Vietnam were getting cheaper and cheaper when compared to the nation’s per capita income. The tobacco price index calculated in percentage compared to Vietnam’s per capita income dropped from 11.4% in 2000 to 3.04% in 2019, the report said.

The percentage between tobacco taxes and their retail prices in Vietnam is only 38.8%, much lower than in countries with average incomes (59%) and is around half when compared to most Southeast Asian countries, including Thailand, Singapore and Indonesia.

The World Health Organization and the World Bank have recommended that tobacco taxes should account for 75% of their retail price to have an impact on purchases. Both organizations also consider tobacco prices and taxes to be the most important factors in controlling tobacco use.

On average, a 10% increase in prices would result in a 4% reduction in tobacco use in countries with high incomes, and a 5% reduction in countries with average or low incomes, according to the WHO.

Son said countries have been switching from proportional taxes to flat taxes and hybrid taxes in their bids to reduce smoking rates. A flat tax would apply the same amount of tax on every tobacco pack regardless of brand, preventing smokers from switching to cheaper brands. A flat tax would also reduce the number of cheap tobacco products, which would lower their accessibility to young people, Son added.

Flat taxes would often lead to higher prices and are also easier to manage. They are also less susceptible to price manipulation, he said.

According to a WHO report, the number of countries still applying proportional taxes for tobacco products reduced from 57 in 2008 to 42 in 2018. Meanwhile, the number of countries applying hybrid taxes has increased from 48 in 2008 to 63 in 2018.

Most countries in Southeast Asia are also applying either flat or hybrid taxes for tobacco products. Brunei, Indonesia, Malaysia, the Philippines, Singapore and Myanmar all use flat taxes; Laos and Thailand use hybrid taxes, while Vietnam and Cambodia use proportional taxes.

Angela Pratt, the WHO representative in Vietnam, said tobacco was incredibly cheap in Vietnam, so price would not be an obstacle for the youth. This needs to change, she said, adding that higher taxes would be quickest and most efficient solution to make it difficult for young people to smoke.

Ho Hong Hai, deputy head of the legislation department under the Ministry of Information and Communications, said Vietnamese people spend around VND49 trillion ($1.97 billion) a year on tobacco, and while Vietnam is not yet a developed country, its smoking rate is among the top 15 in the world.

 
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