Special consumption tax on alcoholic drinks and cigarettes is likely to increase by 15-30 percentage points in mid-2015, with the Ministry of Finance making a proposal to the effect to the Government as part of efforts to reduce their consumption.

It seeks to increase the tax on cigarettes to 75 percent from the current 65 percent, and this will go up by another 10 percent in early 2018.

According to the ministry, the higher tax is expected to contribute an additional 2.93 trillion VND (140 million USD) in revenues in 2016 and 7.7 trillion VND (367 million USD) in 2018.

The SCT on beer and liquor will increase to 65 percent from the current 50 percent, contributing an additional 7.8 trillion VND (371 million USD) and 389 billion VND (19 million USD) respectively.

The ministry has blamed alcohol consumption for not only affecting people's health but also causing some serious social problems like violence, social disorder, crime, and accidents.
Vietnam is the third largest per-capita consumer of beer in Asia behind only China and Japan. Last year the country consumed 3 billion litres, or 32 litres per person.

The smoking rate too is high, with around 15 million people lighting up and also making millions of others, including women and children, passive smokers. Cigarettes killed 40,000 people in 2008, and the ministry expects the number to rise to 50,000 by 2023.

In early 2010, an SCT of 45 percent was slapped on wine and beer, and this was increased to 50 percent last year. During the last decade, Vietnam's liquor and beer industries grew strongly despite the global recession and played an important part in the country's industrial development.

They plan to produce 4.7 billion litres of beer and 540 million litres of liquor next year.-VNA