On May 14th, according to a report by Vietnam Labor News, the Vietnamese Ministry of Finance has submitted a draft report to the Ministry of Justice regarding the establishment of a Special Consumption Tax Law (SCT). The proposed draft includes a suggestion to continue levying a consumption tax on electronic cigarettes.
Launch of new tobacco pilot business.
The Ministry of Finance has reported that there is a growing presence of new tobacco products on the market, including various types of e-cigarettes, heated tobacco products, and water pipes. Although these products are currently not allowed to be imported and traded in Vietnam, Vietnamese adolescents (both male and female) have already been using them.
At present, the Vietnamese Ministry of Industry and Trade is submitting a draft bill to the Prime Minister of the government. The bill contains several provisions and measures aimed at amending the Tobacco Harm Prevention and Control Law of 2012. It includes provisions related to the launch of pilot projects for new tobacco products in Vietnam.
Electronic cigarettes openly sold online in Vietnam | Image source: Tri Minh
New Tax Standards for Emerging Tobacco Industry
The Ministry of Finance has reported that 71 countries have imposed consumption taxes on e-cigarettes. Of these, 23 countries use a fixed tax rate, 7 countries use a percentage-based tax rate, while the remaining countries use a combination of fixed and percentage-based taxes. However, overall, these countries' taxation levels on e-cigarettes are as high as traditional cigarettes. For heated tobacco products, 61 countries impose consumption taxes at the same rate as traditional cigarettes.
The Ministry of Finance stated that based on Article 6 of the World Health Organization's Framework Convention on Tobacco Control (FCTC), WHO has recommended that countries prohibit electronic cigarettes or take measures to control electronic cigarette products, as well as restricting heated tobacco products and water pipes.
Therefore, if Vietnam has control measures on electronic cigarettes, heated tobacco products, and shisha, the Ministry of Finance recommends implementing the same tax policy as regular cigarettes to ensure an increase in price and a decrease in demand for use.
The Ministry of Finance has announced that…
If the Prime Minister's decision allows for the pilot of this project, it will be necessary to regulate the taxation of new tobacco products in order to limit tobacco consumption.
The Ministry of Finance has stated that specific regulations regarding new tobacco products, as well as how to tax new tobacco accessories and equipment, will be studied and formulated into corresponding regulations after being passed by Congress, to be known as the SCT Law.
References:
The Ministry of Finance maintains the proposal to impose a special consumption tax on electronic cigarettes.
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