Proposed tax hike would raise alcoholic drink prices by 20% from 2026 in Vietnam

Vietnam’s Ministry of Finance plans to increase the excise tax on alcoholic drinks (wine, spirits, beer) to raise the prices of these products by 20% from 2026, according to draft amendments to the excise tax law prepared by the ministry.

The excise tax on beer in Vietnam rose from 45% in 2010-2012 to 50% in 2013, 55% in 2016, 60% in 2017, and 65% from 2018. For wine and spirits with alcohol by volume (ABV) of at least 20%, the rate went up from 50% to 55% in 2016, 60% in 2017, and 65% from 2018. For wine and spirits with ABV below 20%, the rate went up from 25% to 30% in 2016 and 65% from 2018.

The higher tax is part of the country’s efforts to reduce the negative impacts of alcohol, the ministry clarified. Initially, the target was to raise retail prices of alcoholic drinks by 40%.

For beer, the ministry has proposed an excise tax of 80% in 2026, towards 100% in 2030. The ministry estimates that this would push up retail prices by 20% year-on-year in 2026 and 2-3% per year afterward.

Regarding wine and spirits with ABV of at least 20%, the ministry is seeking an excise tax of 80% in 2026, 85% in 2027, 90% in 2028, 95% in 2029, and 100% in 2030. It calculated that this would raise retail prices by 20% year-on-year in 2026 and 2-3% per year afterward.

For wine and spirits with ABV of below 20%, the ministry seeks higher excise tax of 50% in 2026, towards 70% in 2030. It calculated the same retail price hike as above.

Notably, the ministry recommended that wine and spirits will also include drinks with alcoholic contents fermented from fruit and cereal (such as cider) and drinks made by mixing alcohols.

The Vietnam Beer-Alcohol-Beverage Association (VBA) reported that in 2023, revenues and profits in the beer sector fell 11% and 23% year-on-year, respectively.

In January, illicit and unregulated alcohol accounted for 63% of consumption in Vietnam, as the current legal framework has yet to fully address the issue.