Vietnam’s National Assembly has approved a proposal to raise the special consumption tax on alcoholic beverages to 90% by 2031 from the current 65%. The tax rate on beer and strong liquor will rise to 70% by 2027, a year later than initially proposed, before reaching 90% in 2031.
Vietnam currently imposes a 65% tax on these products and the initial proposal last year had the tax rising to as high as 100%. The finance ministry has said the aim of the higher taxes is to curb alcohol consumption.
Vietnam is Southeast Asia’s second-largest beer market, according to a report by consultancy KPMG in 2024. Vietnam’s beer industry, led by Dutch brewer Heineken, Denmark’s Carlsberg, and local brewers Sabeco and Habeco are facing challenges from stringent drink-driving laws introduced in 2019, which set a zero-alcohol limit for drivers.
As a result, for the first time in decades, the beer market in Vietnam saw a double-digit decline in 2023 and continued mid-single digit decline so far this year, Heineken said. The company said the decision to “temporarily suspend” the Quang Nam brewery, the smallest of its six breweries in the country, was aimed at addressing “asset-related solutions”.