Empirical analysis on the illicit trade of cigarettes in Vietnam.

Abstract:

BACKGROUND:This paper examined how a higher tax on tobacco would affect illicit trade in Vietnam. METHODOLOGY AND DATA:This paper used the gap method to estimate the gap between cigarette domestically tax-paid sales and domestic consumption. Data were from the tax-paid sales by the Vietnam Steering Committee on Smoking and Health (VINACOSH), the Vietnam Tobacco Association, the General Tax Department, as well as two rounds of the Global Adult Tobacco Survey in 2010 and 2015. KEY RESULTS:The results indicated that Vietnam had a negative volume of illicit trade, either a result of under-reporting of tobacco use or due to net smuggling of tax-paid cigarettes out of the country. Furthermore, the trend showed an increased negative volume over time, which indicated that increases in tobacco taxes in the interleading years did not result in an increase in illicit trade in tobaccos in Vietnam. CONCLUSIONS:Vietnam's low prices on domestic cigarettes created favourable conditions for cigarette smugglers and provided easy access to illicit cigarettes for the Vietnamese people, but the absence of a relationship between tax changes and smuggling suggested that potential increases in the excise tax should not be discouraged by the threat of an increase in illicit trade. The government should increase taxes on cigarettes to raise domestic cigarette prices and take strong policy measures to create a more transparent social environment, therefore effectively reducing the prevalence of illicit cigarettes in Vietnam.

journal_name

Tob Control

journal_title

Tobacco control

authors

Nguyen HTT,Giang LT,Pham TN

doi

10.1136/tobaccocontrol-2019-055598

subject

Has Abstract

pub_date

2020-10-01 00:00:00

pages

s281-s286

issue

Suppl 4

eissn

0964-4563

issn

1468-3318

pii

tobaccocontrol-2019-055598

journal_volume

29

pub_type

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