Vietnam's National Assembly last month approved plans to hike taxes on alcohol from 65% to 90% by 2031, a major step in the government's efforts to curb harmful consumption habits.

The tax hike comes amid rising concerns within the ruling Communist Party about excessive drinking in Vietnam, with the authorities still struggling to enforce a zero-tolerance policy on drink-driving that was brought in in 2019.

But the move is facing opposition from the alcohol industry. Even though Vietnam is Southeast Asia's second-largest beer market, according to a report by the consultancy group KPMG, the industry has been struggling with declining sales in recent years.

Under the initial plans, taxes would have hit 80% in 2026 and risen to 100% by 2030. But it is thought that the authorities watered down the levies after lobbying from the alcohol industry.

The Special Consumption Tax (SCT) on alcohol and beer will now rise from the current 65% to 70% by 2027 and ultimately to 90% by 2031. Lawmakers also approved a new tax of 8% on sugary drinks exceeding 5g/100ml of sugar that will take effect in 2027 and rise to 10% in 2028.

Last year, alcohol industry bodies warned that the gradual tax rate hike could increase retail prices by at least 10% annually.

Deputy Prime Minister Le Thanh Long, who has steered this law through parliament, has said that the higher taxes are necessary to address public health concerns.

Alcohol consumption rates have steadily increased, from 2.9 liters of alcohol per person in 2005 to 7.9 liters in 2019, according to a report last year from the Department of........

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