Vietnam approves 90% tax on strong alcoholic drinks

Vietnam’s National Assembly has approved a steep increase in special consumption tax on alcoholic beverages, raising the rate on beer and spirits with over 20 percent alcohol content to 90 percent by 2031, up from the current 65 percent, state media reports.

The tax will increase gradually by 5 percentage points each year, starting 2027. Alcoholic beverages with under 20 percent alcohol content, currently taxed at 35 percent, will also see annual increases, reaching 60 percent by 2031.

According to the new law, drinks containing more than five grams of sugar per 100 ml will be taxed at 8 percent from 2027 which will further rise to 10 percent in 2028.

Legislators stated that the phased hikes aim to help consumers adjust gradually rather than force abrupt behavioural changes.

Beer sales in Vietnam declined after the government introduced a zero-alcohol rule for drivers in 2019. However, analysts say the country’s deep-rooted drinking culture is unlikely to be significantly altered.