Viet Nam puts the alcohol tax increase into effect. The plan, announced by the Ministry of Finance on July 11, also includes new taxes on sugary drinks and tobacco. Policymakers aim to reduce alcohol harm, now the country’s second leading cause of death, and improve healthcare funding as the population ages.
Despite alcohol industry pushback, the Vietnamese Parliament prioritised people’s health, highlighting that higher alcohol taxes deliver multiple benefits: lowering alcohol use, harm, and costs, generating revenue, supporting investments on government programs, and promoting equity and justice. Backed by the WHO, this reform sets a compelling regional example for prevention-focused policy making.

Government Steps Up Efforts to Prevent Harm and Boost Health Investments

Vietnam has officially adopted a long-anticipated plan to raise alcohol taxes, marking a decisive move to prevent harm caused by alcohol and fund critical health reforms. According to ABS, the Special Consumption Tax (SCT) on alcohol will rise from the current 65% to 90% by 2031. The revised law, announced during a press conference on July 11 by the Ministry of Finance, also introduces new taxes on sugary drinks and tobacco.

Tax Schedule and Product Categories

Based on the updated law outlined by Vietnam Economic Times, alcohol products will be taxed progressively over a five-year period beginning in 2027:

  • Spirits with 20% alcohol content or higher: from 65% in 2026 to 90% in 2031;
  • Alcohol products with less than 20%: from 35% in 2026 to 60% in 2031;
  • Beer: from 65% in 2026 to 90% in 2031.

Additionally, sugary beverages exceeding 5g of sugar per 100ml will be taxed at 8% starting in 2027, rising to 10% in 2028. Tobacco taxes will maintain a 75% rate, but a new absolute tax will be introduced: for example, cigarettes will incur an additional VND 2,000 per pack annually from 2027, reaching VND 10,000 per pack by 2031.

Policy Rationale: Public Health and Sustainability

Deputy Prime Minister Le Thanh Long emphasised that these tax reforms are a response to worsening health outcomes.

According to the World Health Organisation, population-level alcohol consumption was at 9.3 liters in 2019 and is projected to keep rising to 10.7 liters of pure alcohol per capita in 2030.

Alcohol is now the second leading cause of death in the country, according to the Department of Preventive Medicine. These alarming trends require alcohol policy to be a national priority.

9.3 liters
Rising Alcohol Use Requires Policy Action
According to the World Health Organisation, population-level alcohol consumption was at 9.3 liters in 2019 and is projected to keep rising to 10.7 liters of pure alcohol per capita in 2030.
WHO Country Profile Vietnam

The reforms also address the financial sustainability of the healthcare system. Vietnam’s government is preparing for major demographic shifts. The population is aging, and public health care costs are rising. The government aims to provide free hospital care to 90% of the population by 2030, as reported by ABS.

Increasing alcohol taxes is part of a broader public investment strategy to reduce out-of-pocket health costs, which currently account for 45% of national health spending.

Industry Pushback and Public Interest

Despite the public health urgency, the alcohol industry has resisted these changes. ABS reports that lobbying efforts led to delays in the original tax schedule, which initially aimed for a 100% rate by 2030. Industry representatives have also interfered against the introduction of a proposed health levy under the draft Disease Prevention Law.

However, people’s interest has prevailed. According to research, Vietnam’s Parliament made a historic decision to prioritise people’s health over Big Alcohol interests. It highlighted that raising alcohol taxes is a quadruple-win policy:

  • Reducing alcohol use, harm, and costs,
  • Raising revenue for public services, 
  • Supporting investments in government programs for health and development promotion, and
  • Promoting health equity and social justice.

For instance, compelling studies show that every dollar invested in alcohol taxation can return up to $53 in social and economic benefits.

The Vietnamese government’s commitment and leadership, supported by the World Health Organisation, sets a compelling example for health promotion across the region.

Viet Nam Takes Historic Step to Reduce Alcohol Harm and Promote Development: Parliament Approves Major Alcohol Tax Increase

Expanding Prevention Beyond Alcohol to Other NCDs Risk Factors

In line with alcohol policy initiatives, the new law also taxes other unhealthy products. This includes high-sugar beverages, underlining a broad commitment to disease prevention. The Ministry of Health has also proposed establishing a Disease Prevention Fund, supported by tax revenues from these health harming products.

These coordinated actions reflect a forward-looking approach to health governance. With effective implementation, Vietnam is set to prevent and reduce alcohol harm, protect future generations, and build a more equitable health system.

Sources

Vietnam Economic Times: “Amended Law on Special Consumption Tax promulgated“

ABS-CBN News: “Why is Vietnam cracking down on alcohol?“

Báo Tuổi Trẻ: “Special consumption tax: Cigarettes up 2,000 VND, soft drinks 20,000 VND, beer up 65%“