The Vietnam Tobacco Association (VTA) has recommended a phased implementation and pilot testing for a proposed ban on all tobacco product displays at retail points. The proposal, drafted by the Ministry of Health, aims to protect public health but raises concerns regarding retail enforceability and illicit trade.
The draft law would amend the current Law on Prevention and Control of Tobacco Harm, which allows retailers to display one pack or carton per brand. VTA representatives argue that this limited display helps consumers identify legal products. Removing it entirely could make it harder for buyers to distinguish between legal and smuggled goods.
Balancing Public Health with Retail Reality
Mr. Tran Le Minh, Deputy Head of the Market Department at the VTA, noted the economic footprint of the industry, which contributed over 50,000 billion VND to the state budget in 2024 and 2025. However, illicit trade remains a challenge. "Smuggled cigarettes cause a loss of approximately 4,000-5,000 billion VND in state revenue each year and a loss of about 400 million USD in foreign currency," Minh stated.
The display ban coincides with upcoming tax adjustments. Under Law No. 66/2025/QH15, Vietnam will introduce an absolute tax on cigarettes starting in 2027, which will scale up through 2031.
| Effective Date | Base Special Consumption Tax | Additional Absolute Tax (Per Pack) |
|---|---|---|
| January 1, 2027 | 75% | VND 2,000 |
| January 1, 2031 | 75% | VND 10,000 |
This tax structure is expected to widen the price gap between legal and smuggled cigarettes, particularly in border and rural areas. The VTA warns that a complete display ban, paired with higher prices, could push transactions to unregulated online channels.
Proposed Solutions and Singapore's Model
To address these challenges, the VTA proposed three measures: strengthening anti-smuggling communication, monitoring online sales, and establishing a clear transition roadmap.
Mr. Nguyen Chi Nhan, General Secretary of the VTA, emphasized the need for clear legal definitions. "It is necessary to clarify what constitutes 'display' and what is merely storing goods for sale, to avoid situations where sellers unintentionally violate regulations," Nhan said.
The association suggested a transition period of 18 to 24 months before full implementation. This aligns with international precedents like Singapore, which passed display ban regulations in August 2016 but delayed enforcement until August 2017 to give retailers time to prepare. The VTA also recommended running localized pilot programs to evaluate compliance rates, inspection times, and retail costs before applying the ban nationwide.
