Vietnam: Vietnam proposes to hike special consumption tax on alcohol to 100% by 2030

Vietnam’s Finance Ministry has proposed to hike a special consumption tax on alcoholic drinks to 100% by 2030, the ministry said, a move that may further hurt the country’s beverage industry, KFGO reported on June 13.

Under the draft proposal which is pending lawmakers’ approval, the special consumption tax on beer and strong liquor will be raised to 70%-80% by 2026 and gradually increase it to 90%-100% in 2030, compared with the current 65%.

“Alcoholic drinks and beer prices will increase by 20% in 2026, compared with 2025,” the finance ministry said in the proposal, adding that prices would continue to increase by 2%-3%, depending on inflation.

“Levying high tax rates is necessary to help reduce consumption of alcoholic drinks,” it added.

Vietnam’s beer industry has already been hit by the country’s strict drink driving law, under which the alcohol content limit for drivers is zero since 2019.

Last year, beer industry revenue decreased by 11% and profits decreased by 23%, according to estimations of the Beer – Alcohol – Beverage Association.

Shares in Sabeco, Vietnam’s largest brewer, fell by 3.96% on Friday morning after the ministry’s proposal.

The finance ministry also proposed a hike in special consumption tax on soft drinks and cigarettes.

14 June, 2024