HANOI : Vietnam’s National Assembly has formally approved a staged increase in special consumption tax on alcoholic beverages, which will see the rate climb from the current 65% to 90% by 2031. The measure, passed on Saturday 14 June, reflects the government’s ongoing strategy to discourage alcohol consumption through fiscal policy, although the final rate is lower than the originally proposed ceiling of 100%.
Under the new legislation, the excise tax on beer and high-strength spirits will be raised to 70% by 2027—one year later than previously anticipated—before incrementally increasing to 90% by 2031. The Ministry of Finance stated the move is intended to address public health concerns by curbing alcohol intake, particularly in light of the country’s growing consumption trends.
Vietnam remains the second-largest beer market in Southeast Asia, according to a 2024 report by KPMG. However, the domestic industry has already come under pressure from tightening regulatory measures. A significant setback came in 2019, when the government introduced strict drink-driving laws that set a zero-alcohol threshold for motorists, which has contributed to declining demand.
The industry—dominated by global brewers Heineken (Netherlands), Carlsberg (Denmark), and domestic players Sabeco and Habeco—has seen revenue fall for three consecutive years, according to the Vietnam Beer and Alcoholic Beverage Association. In response to deteriorating market conditions and the prospect of higher taxation, Heineken last year suspended operations at one of its facilities in the country.
In a parallel development, legislators also approved a new sugar-sweetened beverage levy, targeting drinks containing more than 5g of sugar per 100ml. The levy is scheduled to take effect in 2027 at 8%, rising to 10% in 2028, in a move aligned with broader public health objectives.
-Reuters
