Experts are seeking a much larger increase in the special consumptiontax on tobacco products than that proposed by the Ministry of Finance.
Ata press conference on September 13, experts said the ministry'sproposal was too low and not strict enough to reduce consumption andfight trade fraud.
They cited the tax rate on the retailprice of cigarettes in Vietnam , which currently stands at 41.6percent. To achieve the national strategy of reducing smoking from 47.4percent to 39 percent of males in the population, the new tax must be105 percent in July 2015 and 145 percent in 2018.
Accordingto the draft amendment on the Law on Special Consumption Tax of theMinistry of Finance, the consumption tax on cigarettes will be raisedfrom 65 percent in 2014 to 75 percent in 2015 and 85 percent in 2018.
Thenew tax is expected to contribute more than 2.9 trillion VND (131.8million USD) in taxes next year and 7.7 trillion VND (350 million USD)in 2018.
Nguyen Tuan Lam from the World HealthOrganisation said that if the new tax could increase the price ofcigarettes by 10 percent, the consumption level will fall by a mere fivepercent.
The experts' proposal has received support fromthe non-government organisation HealthBridge Canada in Vietnam .Pham Thi Hong Anh, HealthBridge Canada country director, cited theMinistry of Health's report in 2010, which said 15 million Vietnamesepeople were smokers, and one of every four smokers were 15 to 24 yearsold.
One of the reasons why millions of Vietnamese couldafford to smoke was the low tobacco tax rate, which was only higher thanthat of Cambodia compared with other ASEAN countries, Hong Anhsaid. Vietnam imposed a 41.6 percent rate while that of Brunei was81 percent, Singapore 71 percent and Thailand 70 percent.
HongAnh said the tax rate should account for two-thirds of the retail priceto achieve the target for reducing tobacco consumption.
"Theproposal of the Ministry of Finance to raise the rate from 65 percentto 75 percent is, in my opinion, not effective. The consumption power ofthese products will not change," she noted.
Replying toconcerns that a high tax rate could lead to a rise in smuggling, HongAnh said tight management of the retail market could help in minimisingsmuggling.
She said the fight against smuggling was mainlyfocused on the border gates and remained loose in domestic areas. Iftobacco trading in domestic areas is placed under strict control, theproblem will be solved, she added.
However, Phan Thi Haifrom the Ministry of Health's Prevention and Control on Tobacco HarmProgramme said the experts' proposal was quite high.
Shesaid the ministry agreed with the increase but proposed raising it from65 percent in 2014 to 85 percent in 2015 and 105 percent in 2018. Haiadmitted that this will only maintain smokers' current purchasingpower.-VNA
Ata press conference on September 13, experts said the ministry'sproposal was too low and not strict enough to reduce consumption andfight trade fraud.
They cited the tax rate on the retailprice of cigarettes in Vietnam , which currently stands at 41.6percent. To achieve the national strategy of reducing smoking from 47.4percent to 39 percent of males in the population, the new tax must be105 percent in July 2015 and 145 percent in 2018.
Accordingto the draft amendment on the Law on Special Consumption Tax of theMinistry of Finance, the consumption tax on cigarettes will be raisedfrom 65 percent in 2014 to 75 percent in 2015 and 85 percent in 2018.
Thenew tax is expected to contribute more than 2.9 trillion VND (131.8million USD) in taxes next year and 7.7 trillion VND (350 million USD)in 2018.
Nguyen Tuan Lam from the World HealthOrganisation said that if the new tax could increase the price ofcigarettes by 10 percent, the consumption level will fall by a mere fivepercent.
The experts' proposal has received support fromthe non-government organisation HealthBridge Canada in Vietnam .Pham Thi Hong Anh, HealthBridge Canada country director, cited theMinistry of Health's report in 2010, which said 15 million Vietnamesepeople were smokers, and one of every four smokers were 15 to 24 yearsold.
One of the reasons why millions of Vietnamese couldafford to smoke was the low tobacco tax rate, which was only higher thanthat of Cambodia compared with other ASEAN countries, Hong Anhsaid. Vietnam imposed a 41.6 percent rate while that of Brunei was81 percent, Singapore 71 percent and Thailand 70 percent.
HongAnh said the tax rate should account for two-thirds of the retail priceto achieve the target for reducing tobacco consumption.
"Theproposal of the Ministry of Finance to raise the rate from 65 percentto 75 percent is, in my opinion, not effective. The consumption power ofthese products will not change," she noted.
Replying toconcerns that a high tax rate could lead to a rise in smuggling, HongAnh said tight management of the retail market could help in minimisingsmuggling.
She said the fight against smuggling was mainlyfocused on the border gates and remained loose in domestic areas. Iftobacco trading in domestic areas is placed under strict control, theproblem will be solved, she added.
However, Phan Thi Haifrom the Ministry of Health's Prevention and Control on Tobacco HarmProgramme said the experts' proposal was quite high.
Shesaid the ministry agreed with the increase but proposed raising it from65 percent in 2014 to 85 percent in 2015 and 105 percent in 2018. Haiadmitted that this will only maintain smokers' current purchasingpower.-VNA
