Vietnam parliament approves hiking tax on alcoholic drinks to 90% by 2031

Under the legislation, the tax rate on beer and strong liquor will rise to 70 percent by 2027, a year later than initially proposed, before reaching 90 percent in 2031.

Vietnam currently imposes a 65-percent tax on these products and the initial proposal last year had the tax rising to as high as 100 percent.

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, has already faced challenges from stringent drink-driving laws introduced in 2019, which set a zero-alcohol limit for drivers.

The country's Beer and Alcoholic Beverage Association chief has said industry revenue has declined for the past three years.

In response to weakening demand and the initial proposal for the tax hike, Heineken last year suspended operations at one of its Vietnam breweries.

On Saturday, the lawmakers also approved a new levy of eight percent on sugary drinks exceeding 5g/100ml of sugar that will take effect in 2027 and rise to 10 percent in 2028.