news

As part of its initiatives, the Vietnam Tax Justice Alliance (VATJ) effectively hosted a policy dialogue titled ” The Relationship between Cigarette Excise Tax and Household Well-being.” This event took place in Ho Chi Minh City on the afternoon of August 10, 2023, and was organized by the Vietnam Center for Economic and Strategic Studies (VESS).

Download policy brief and presentation here

During his opening remarks, Associate Professor, PhD. Nguyen Duc Thanh – President of VESS, provided context and outlined the objectives of the research. The high prevalence of smoking in Vietnam has led to significant economic, social, and health challenges for the nation. To address this issue, Vietnam has implemented various strategies, with the most successful being the imposition of higher taxes on cigarettes. However, this effort has faced opposition from the tobacco industry, which argues that increased cigarette taxes would encourage widespread smuggling, in addition to the regressive nature of this consumption tax on low-income consumers. This opposition has played a role in maintaining Vietnam’s cigarette tax rates among the lowest in the ASEAN region.

Dr. Nguyen Duc Thanh opening the event

In the next section, two research team representatives including Dr. Le Huong Linh and MA. Pham Van Long gave a presentation on the research: “The impact of tobacco taxes on multidimensional household welfare: Evidence from Vietnam”. The VESS Research Team found that cigarette prices in the Vietnamese market are still too low compared to income, making it easy for consumers to access cigarettes. Vietnam’s tobacco industry is characterized by being dominated by a state monopoly.

Dr. Le Huong Linh presented research results

Research results also show that a higher proportion of tobacco spending in total expenditure has a negative impact on the multidimensional welfare of households, especially poor households. This implies that cutting tobacco spending will help improve multidimensional household well-being in Vietnam. Although the economic benefits brought by the tobacco industry cannot be denied, these benefits need to be weighed against long-term and sustainable human development in the true sense of multidimensional wellbeing: healthy and happy people.

MA. Pham Van Long presented the research results

The event continued with a policy discussion among participants which was aimed to connect policymakers, experts and media with similar interests in the issue of tobacco tax reform based on multidimensional justice. This is also an opportunity for individuals to exchange opinions and discuss with experts in related fields, contributing to raising awareness and deepening understanding of tobacco issues in Vietnam.