Alcohol Excise Taxes in Vietnam - Policy brief - Opportunity to Save Lives while Increasing Tax Revenues

Jul 19, 2026

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The policy brief examines how alcohol excise taxes in Vietnam can reduce alcohol-related mortality and morbidity while strengthening fiscal revenues. It links rising health harms to falling real prices and improved affordability, driven by a tax structure that does not sufficiently raise consumer prices. Using evidence and World Bank simulations, it compares ad valorem taxes with specific or mixed systems and estimates changes in beer affordability, sales, and tax revenue. The brief concludes that tax structure reforms must accompany meaningful tax increases to achieve health gains without large negative economic impacts.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages34

Reading Time1 h 26 min

Executive Summary

Health impacts and affordability trends

Tax structure: ad valorem vs specific taxes

Simulation results and expected effects

Policy recommendations and economic impact evidence

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized October 2024 Alcohol Excise Taxes in Vietnam: Opportunity to Save Lives while Increasing Tax Revenues Health Taxes Knowledge Note \#7 Health taxes are excise taxes on products that have a negative public health impact: tobacco, alcoholic beverages and sugar-sweetened beverages. The Health Taxes Knowledge Notes respond to specific questions on health taxes and key issues raised during health tax reforms, based on global best practices, scientific evidence and the World Bank’s experience from working with countries on design and implementation of health tax reforms. The series is produced under the Global Tax Program Health Taxes Project. Join us as we explore effective use of health taxes to improve population health and the fiscal environment. This policy brief was prepared by World Bank Global Tax Program Health Tax Project team in collaboration with Governance Global Practice. For questions or feedback, please contact Evan Blecher, Ceren Ozer, and Viet Anh Nguyen. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Attribution Please cite the work as follows: “Blecher E., Ozer, C., and Nguyen V. (2024). Alcohol Excise Taxes in Vietnam: Opportunity to Save Lives while Increasing Tax Revenues Policy brief. Washington, DC.: World Bank.” Cover photo: © Adobestock. EXECUTIVE SUMMARY Vietnam has experienced dramatic increases in alcohol related mortality and morbidity, increasing by 460 percent since 1990, and 79 and 104 percent higher than the average in southeast Asian and lowermiddle-income country. Increasing mortality and morbidity coincides with large increases in alcohol sales, driven by falling prices and rising affordability. Between 2008 and 2022, prices of beer, wine and spirits declined by 24, 5, and 45 percent (in inflation adjusted terms), becoming 70, 62, and 78 percent more affordable, leading to per capita alcohol sales increasing by 142 percent. This is despite tax increases that have been too small to affect prices, in addition to a poorly designed tax structure. When well-designed and implemented, alcohol excise taxes reduce health harms simultaneously increasing tax revenue. Vietnam applies ad valorem taxes early in the supply chain. This structure is ineffective as tax increases do not result in increases in price and encourage consumers to avoid tax increases by trading down to cheaper products. Ad valorem taxes are not in line with regional and global best practices. Rather, specific taxes (taxes applied to the volume rather than value of the products) are more effective in increasing prices and reducing sales. Whether implemented as a standalone system or combined with ad valorem taxes as a mixed system, they are considered a best practice and have become nearly universally adopted in other ASEAN countries. The World Bank conducted simulations to estimate the impact of tax structure reforms and tax increases on beer sales and tax revenue. Without policy reforms, beer is expected to become 12 percent more affordable leading to an 8 percent increase in sales over the next five years as incomes continue to increase. Meanwhile, increasing effective taxes by 31 percent (in inflation adjusted terms) would have a significant impact in reducing sales and thus improving health, however the impact on sales and health varies depending on the tax structure employed. Increasing the current ad valorem tax rate with no reform of the tax structure will result in sales being 12.0 percent lower than would otherwise occur without any reforms. Meanwhile, achieving the tax increase while ref

FAQs

Why are alcohol-related harms increasing in Vietnam despite tax increases?

Alcohol mortality and morbidity have risen alongside larger alcohol sales, supported by declining real prices and higher affordability. The brief argues that Vietnam’s ad valorem tax structure has been too small and poorly designed to increase prices meaningfully, encouraging consumers to trade down.

How do specific taxes differ from ad valorem taxes in their expected effects?

Ad valorem taxes are applied based on product value, and the brief notes they may not raise consumer prices effectively in Vietnam’s context. Specific taxes apply based on product volume and are considered more effective at increasing prices and reducing sales, aligning with regional best practices.

What do the World Bank simulations suggest about beer affordability and sales?

Without reforms, beer is expected to become more affordable and sales to increase over the next five years. Increasing effective taxes and adopting different tax structures are projected to reduce affordability, lower sales, and improve health outcomes, with impacts varying by structure choice.

Do higher alcohol taxes harm employment and investment?

The brief states that concerns about negative economic impacts are overemphasized. Evidence from other countries indicates job losses in affected firms or sectors are offset by employment gains elsewhere, and that indirect costs related to alcohol can increase overall productivity effects.

Jul 19, 2026

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