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Modelling the expected impact of cigarette tax and price increases under Vietnam’s excise tax law 2015–2020
  1. Mark Goodchild1,
  2. Le Thi Thu2,
  3. Dao The Son3,
  4. Lam Nguyen Tuan4,
  5. Robert Totanes1,
  6. Jeremias Paul1,
  7. Kidong Park4
  1. 1Health Promotion Department, World Health Organization, Geneva, Switzerland
  2. 2HealthBridge Foundation of Canada, Hanoi, Vietnam
  3. 3Thuongmai University, Ha Noi, Vietnam
  4. 4World Health Organization Country Office for Viet Nam, Hanoi, Vietnam
  1. Correspondence to Mark Goodchild, World Health Organization, Geneva, Switzerland; goodchildm{at}who.int

Abstract

Background Vietnam’s national tobacco control strategy aims to reduce the rate of smoking among male adults from 45% in 2015 to 39% by 2020. The aim of this paper is to assess what contribution cigarette tax increases under Vietnam’s current excise tax plan can be expected to make to this target, and to discuss what additional measures might be implemented accordingly.

Methods This study uses a mix of administrative datasets and predictive modelling techniques to assess the expected impact of tax and price increases on cigarette consumption, tobacco tax revenues and the rate of smoking between 2015 and 2020.

Findings The average retail price of cigarettes is estimated to have increased by 16% (sensitivity analysis: 14%–18%) in inflation-adjusted terms between 2015 and 2020, while cigarette consumption is projected to decrease by 5.1% (4.5%–5.5%). The rate of smoking among males is projected to decrease to 42.8% (42.1%–43.6%) compared with the target of 39%. Total tax revenues from cigarettes are projected to increase by 21% (19%–23%), reflecting an extra ₫3300 billion in inflation-adjusted revenues for the government.

Conclusion The current excise tax law is expected to have only a modest impact on the rate of smoking in Vietnam, though it has generated tax revenues. If Vietnam is to achieve its tobacco control targets, the government should implement a mixed excise system with a high-specific component to promote public health by raising the price of cigarettes more significantly.

  • economics
  • taxation
  • public policy

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Footnotes

  • Contributors MG designed the study, collected secondary data, undertook the analysis and drafted the text. LTT, SD and LNT collected primary data, supported the analysis and contributed to drafting the text. RT, JP and KP contributed to the design of the study and to the drafting of the text.

  • Funding The authors have not declared a specific grant for this research from any funding agency in the public, commercial or not-for-profit sectors.

  • Disclaimer The authors alone are responsible for the views expressed in this article and they do not necessarily represent the views, decisions or policies of the institutions with which they are affiliated.

  • Competing interests None declared.

  • Patient consent for publication Not required.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Data availability statement All data relevant to the study are included in the article or uploaded as ONLINE supplementaL information. All data relevant to the study are included in the article.

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