HANOI, June 14 – Vietnam’s National Assembly has officially approved a major tax reform that will see the special consumption tax on alcoholic beverages increase to 90% by 2031, up from the current 65%, as part of a broader strategy to reduce alcohol consumption and promote public health.
Under the new roadmap, the tax will gradually rise to 70% by 2027—one year later than initially proposed—before reaching the 90% mark by 2031. While the approved rate falls short of the previously floated 100% ceiling, it still marks a significant escalation for Vietnam’s alcohol industry.
The Ministry of Finance stated that the tax hike aims to discourage excessive drinking, particularly in a country that ranks as Southeast Asia’s second-largest beer consumer, according to a 2024 KPMG report.
The industry, however, is already under pressure. Since the enforcement of strict drink-driving regulations in 2019—which include a zero-tolerance policy for drivers under the influence—major brewers have struggled with declining sales. Dutch brewing giant Heineken, Danish firm Carlsberg, and local players Sabeco and Habeco have all seen demand slump. Heineken even suspended one of its Vietnam breweries last year in response to slowing consumption and the looming tax increases.
The Vietnam Beer and Alcoholic Beverage Association confirmed that industry revenue has been on the decline for the past three years.
In a further move to promote healthier lifestyles, lawmakers also approved a new sugar tax. Beverages with over 5 grams of sugar per 100ml will be subject to an 8% tax starting in 2027, which will increase to 10% in 2028.
These policy changes reflect Vietnam’s growing commitment to aligning with global public health trends, but they are expected to pose considerable challenges for both international and local beverage companies operating in the country.
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Source: Vietnam Insider