Vietnam Raises Alcohol Tax To 90% By 2031 Including Sugary Drinks

Vietnam's National Assembly has approved a significant increase in the special consumption tax on alcoholic beverages, raising the rate on beer and strong liquor from the current 65% to 70% by 2027 and reaching 90% by 2031. This move aims to curb alcohol consumption in a country that ranks as Southeast Asia's second-largest beer market and the seventh largest globally for beer consumption. The tax hike follows challenges facing the industry, including strict drink-driving laws introduced in 2019 and declining revenues over recent years. Additionally, Vietnam will introduce a new excise tax on sugary drinks containing more than 5 grams of sugar per 100 milliliters, starting at 8% in 2027 and increasing to 10% in 2028, with exemptions for milk, 100% fruit juice, coconut water, and other specified beverages. The amended Law on Special Consumption Tax also expands taxation to items like certain air conditioners and proposes new taxable items such as online games and cosmetic services. Industry experts note that while these measures will slow market growth, deeply rooted drinking habits in Vietnam may limit their overall impact.