Jump to full article: Thanh Nien (vn), 2010-03-13
Intro: In a report titled “Questions and Answers on Tobacco Taxation in Vietnam” released on March 9, WHO Vietnam said there are no harmful consequences of a tobacco tax increase.
It is unlikely that many people will change to cheaper brands or water-pipe tobacco because the cigarette is largely a brand-loyalty product and substitution happens mostly when the price becomes prohibitively costly, the United Nations agency said.
At the moment the prices of cigarettes are cheap compared to the increased income and have become more and more affordable. Meanwhile, there is also a clear trend of people switching from water-pipe to cigarettes in recent years, the WHO said.
An increase in tobacco taxes could also influence more poor people to give up smoking because their demand is more price sensitive than that of the rich.
The move is also unlikely to affect tobacco farmers in the short and medium term as Vietnam imports about one third of tobacco leaves.
The WHO said an increase in the tobacco tax would not result in a rise in smuggling because tobacco smuggling was determined by many factors including differences in price, the taste of smokers for smuggled cigarettes, acceptance by the public of smuggled products, the strength and effectiveness of anti-smuggling actions, level of transparency and corruption in a country and the level of control on the retailers’ network.
The tax increase would bring in more revenues for the government and is also good for public health. “It is a win-win policy,” the agency said.
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