The Illicit Tobacco Trade in Southeast Asia – Vietnam

In the February issue of Tax Stamp & Traceability News^™, we launched a series of articles by Chander S Jeena on the illicit tobacco trade in Southeast Asia and how it is being dealt with. This month we continue the series with an update on Vietnam.

Cigarette smuggling has been a major concern for the Vietnamese government for many years now, with high levels of cross-border smuggling originating in the neighbouring countries of Laos and Cambodia. The key drivers behind this practice include price differences, consumer behaviour, and demand for foreign brands.

Vietnam is a longstanding user of tax stamps for tobacco products, having introduced them in 2000, with the aim to facilitate the identification of counterfeit cigarettes and other illicit products, as well as reduce tax evasion arising from the under-reporting of sales by domestic companies. The introduction of tax stamps led to an increase in government revenues of between VND 300–500 billion ($19–31 million) per year.