Tears for cheers: Vietnam to raise alcohol tax to 90% by 2031
Vietnam's National Assembly on Saturday approved a proposal to raise the special consumption tax on alcoholic beverages to 90 per cent by 2031, a move that will add to challenges facing the industry even though the top rate will not be as high as first flagged.
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Under the legislation, the tax rate on beer and strong liquor will rise to 70 per cent by 2027, a year later than initially proposed, before reaching 90 per cent in 2031.
Vietnam currently imposes a 65 per cent tax on these products, and the initial proposal last year had the tax rising to as high as 100 per cent.
The finance ministry has said the aim of the higher taxes is to curb alcohol consumption. Vietnam is Southeast Asia's second-largest beer market, according to a report by consultancy KPMG last year.
Heineken beers on a production line. The Dutch brand suspended operations at one of its Vietnam breweries last year in response to weakening demand and the initial proposal for the tax hike. Photo: Reuters
Vietnam's beer industry, led by Dutch brewer Heineken, Denmark's Carlsberg, and local brewers Sabeco and Habeco, has already faced challenges from stringent drink-driving laws introduced in 2019, which set a zero-alcohol limit for drivers.
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