Tobacco prices in Vietnam are the lowest in the world, but Vietnam is one of 15 countries with the highest number of smokers in the world.

According to a study by Health Bridge of Canada and the Hanoi Public Health University conducted in 2010-2011, Vietnam spends VND23 trillion ($1.1 billion) each year to cure five out of 25 tobacco-related diseases. This figure was equal to 1.17% of the country’s GDP in 2010.
 

The five common tobacco-related diseases include: lung cancer, respiratory and upper GI cancer, chronic obstructive pulmonary disease, ischemic heart disease and stroke.

Dr. Pham Thi Hoang Anh, Director of Health Bridge Canada in Vietnam, said: "It's like a vicious circle, the poorer people are, the more they smoke. They buy cheap cigarettes, which are usually more toxic, which means a higher risk of illness. Also, because of economic difficulties, they often delay examinations, resulting in high cost of treatment."

She said that tobacco tax increases could reduce consumption of tobacco and increase tax revenues. However, the tobacco tax rates in the draft amendments to the Law on Special Consumption Tax, which will be discussed at the ongoing National Assembly session, are low, 70 percent in 2016-2018 and 75 percent from 2019.

"The proposed tax rates are far from the recommendation by local and international experts. If the NA adopt this proposal, we will miss a great opportunity to reduce the burden of expenditures and the diseases caused by tobacco and lose a significant source of revenue for the national budget," Dr. Hoang Anh said.

In a letter sent to Deputy Prime Minister Vu Duc Dam in October, representatives of the World Bank (WB) also said the proposed tax rates on tobacco were not sufficient to reduce tobacco consumption within five years.

The WB recommended a minimum rate of 85%, which would then will be held from 2015 to 2017, and increased to 100% from 2018 to 2019, and finally reach 110% by 2020.