Vietnam rethinks approach to tobacco smuggling policy

Vietnam rethinks approach to tobacco smuggling policy

Several experts have said that Vietnam should improve the domestic tobacco industry to reduce the demand for smuggled tobacco.

Destroying smuggled cigarettes

In the years preceding 2010, it seemed that enforcement efforts were effective, with huge amount of cigarettes were destroyed. However, since then the amount of smuggled tobacco has increased by 50%. One official from Market Control Department commented that their staff, customs officials and police were discouraged because of low funding.

According to the Vietnam Tobacco Association, 30% of Vietnam’s current tobacco market is smuggled. They added that smugglers take in an estimated USD240 million each year by avoiding taxes.

There are some who argue that revenues from tobacco sales contribute a great deal to state coffers, and that ways should be found to support the domestic industry, which would aid in the anti-smuggling efforts.

One suggestion was that smuggled tobacco of genuine origin be re-exported after it is confiscated, instead of being destroyed.

They claim that this could save the state budget up to VND100 billion in expenses for destroying smuggled tobacco, not to mention the funds from re-exportation.

Many experts have gone on record as saying the best way to fight tobacco smuggling is to improve the domestic industry. There is somewhat of a consensus that the government should create more favourable conditions so that Vietnamese producers can compete with foreign brands.

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