Finance ministry pushes for rapid increases in beer tax for the next few years to cut consumption

Vietnam’s Ministry of Finance (MoF) has submitted a proposal to the country’s legislature to raise the special consumption tax (SCT) rate of 65% on beer to 100% by 2030. Under the plan, which is pending lawmakers’ approval, the SCT on beer and strong liquor will be raised to between 70% and 80% by 2026, and then gradually increase to between 90% and 100% by 2030.

The finance ministry said in its proposal that alcoholic drinks and beer prices will likely increase by 20% in 2026, compared with 2025 as a result of the hike. Furthermore, prices could continue to increase by a further 2%-3%, depending on inflation.

Levying high tax rates is necessary to help reduce consumption of alcoholic drinks in line with the country’s public health objectives, said the ministry.

The proposal has been met with concern by brewers and impacted industry groups who are lobbying the government to delay the introduction due to the economic damage it could cause to the industry.

The industry has already experienced an 11% cent decline in revenue and a 23% slump in profits in 2023, according to the Vietnam Beer-Alcohol-Beverage Association. Vietnam’s beer sector is also still recovering from the impact of the country’s recent strict drink and driving law, under which the alcohol content limit for drivers became zero since 2019.