In a bold public health move, the Vietnamese government has increased its special consumption tax on alcoholic beverages to 90%, effective later this year. This represents one of the highest tax hikes in the region and is aimed at reducing alcohol consumption and its related health and social issues.
Policy Details
- Previous Tax Rate: 65%
- New Tax Rate: 90%
- Effective From: Expected to be enforced in Q4 2025
- Applies To: All distilled spirits, beer, and certain ready-to-drink alcoholic products
Government’s Rationale
Officials say the tax is part of a broader national health policy to:
- Reduce alcohol-related health risks
- Discourage underage and binge drinking
- Increase public revenue for healthcare initiatives
Industry Impact
The liquor industry in Vietnam, including local brewers and multinational alcohol companies, is expected to be hit hard by the tax. Experts warn of:
- Sharp price hikes
- Decline in alcohol sales volume
- Job losses in beverage production and retail sectors
Some companies may pass on the cost to consumers, while others might reduce production or reconsider expansion plans.
Consumer Reaction
Consumers are likely to feel the pinch, especially as alcohol becomes significantly more expensive. This could lead to a shift toward lower-taxed or illicit alternatives, raising concerns over unregulated alcohol consumption.
Regional Comparison
Vietnam’s 90% tax rate will be among the highest in Southeast Asia, surpassing those in Thailand, Indonesia, and Malaysia.
Conclusion
The Vietnam alcohol tax hike to 90% marks a landmark decision in public health policy. While it aims to reduce alcohol-related harm, its economic and social ripple effects will be closely monitored in the months ahead.
