Vietnam to ban e-cigarettes under Resolution 173? Are e-cigarettes subject to excise tax in Vietnam?

Vietnam to ban e-cigarettes under Resolution 173

On November 30, 2024, the National Assembly passed Resolution 173/2024/QH15 in 2024...Download regarding activities of interpellation at the 8th Session, 15th National Assembly; which included the mention of banning e-cigarettes from 2025.

To be specific, in subsection 2.2, Section 2 of Resolution No. 173/2024/QH15 of the National Assembly regarding the activities of interpellation at the 8th Session, 15th National Assembly in the field of health, the following contents are stipulated:

- Continue to effectively implement the Law on Medical Examination and Treatment 2023; Resolution 99/2023/QH15 in 2023 of the National Assembly on thematic supervision regarding the mobilization, management, and use of resources for COVID-19 prevention and control; the implementation of policies and laws on grassroots health care and preventive medicine.

Implement well the planning of the healthcare facilities network for the period 2021-2030, with a vision to 2050, ensuring consistency and synchronization with other national sector plans, regional plans, and provincial plans for the same period. Develop plans to reserve certain types of drugs, chemicals, medical equipment to assist healthcare facilities in cases that exceed the "on-site" response capabilities of localities and units. Strengthen international cooperation, mobilize, and receive support and endorsement from international organizations and foreign communities in response to and recovery from the impacts of natural disasters, disasters, and epidemics.

- Complete the process of evaluating and issuing practice licenses and operation permits for medical examination and treatment in a transparent, streamlined, and timely manner; enhance management capabilities and personnel for state management in granting practice licenses and operation permits for medical examination and treatment; effectively mobilize the participation of professional associations.

In 2024, implement decentralization of licensing authority in the field of medical examination and treatment. Urgently complete the toolset for capacity assessment, as a basis for inspecting and evaluating the capacity in the field of medical examination and treatment. Accelerate digital transformation; upgrade the national registration and licensing system for medical examination and treatment, connecting with national and local public services systems; aim to establish regulations on the national health database in the first quarter of 2025. Strengthen inspection and assessment of the operations of medical practice facilities, strictly handle violations.

- Focus on implementing the Law amending and supplementing a number of articles of the Medicine Law, the Law amending and supplementing a number of articles of Health Insurance Law 2008, Vietnam's national strategy for the pharmaceutical industry development up to 2030, with a vision to 2045.

Enhance information dissemination, propaganda to help people correctly understand the use of functional foods, ensuring safety. Rectify and strictly handle advertising of functional foods not according to confirmed content or content not verified by competent authorities. Strengthen management, inspection, and post-inspection activities in the production and business of pharmaceuticals, cosmetics, functional foods, especially business activities on e-commerce platforms, e-commerce exchanges, social networks, and strictly publicize violations according to the regulations.

- The National Assembly unanimously banned the production, trading, importation, harboring, transportation, and use of e-cigarettes, heated cigarettes, types of gases, addictive substances harmful to human health from 2025, ensuring public health, order, and social safety; assigned the Government of Vietnam to organize specific implementation. Intensify propaganda to raise public awareness, especially among youths and adolescents, about the harm of alcohol, beer, cigarettes, e-cigarettes, heated cigarettes, types of gases, and addictive substances harmful to human health.

Thus, from 2025, the National Assembly officially banned the production, trading, importation, harboring, transportation, and use of e-cigarettes

See more Resolution 173/2024/QH15 in 2024...Download

Vietnam to ban e-cigarettes under Resolution 173 (Image from the Internet)

Are e-cigarettes subject to excise tax in Vietnam?

Based on the provisions of Article 2 of the Law on excise tax 2008 (as amended by Clause 1, Article 1 of the Law on excise tax Amendments 2014) regarding objects subject to excise tax as follows:

Objects Subject to Tax

1. Goods:

a) Cigarettes, cigars, and other products made from tobacco used for smoking, inhaling, chewing, sniffing, sucking;

b) Alcohol;

c) Beer;

d) Automobiles with less than 24 seats, including cars designed to carry both passengers and cargo with at least two rows of seats, having a fixed partition between the passenger compartment and cargo compartment;

dd) Motor scooters and three-wheeled motorcycles with engine displacement over 125cm3;

e) Aircraft, yachts;

g) All types of gasoline;

h) Air conditioners with a capacity up to 90,000 BTU;

i) Playing cards;

k) Votive paper, votive items.

...

The objects subject to excise tax are cigarettes, cigars, and other products made from tobacco used for smoking, inhaling, chewing, sniffing, or sucking. However, e-cigarettes are handheld electronic devices, using batteries to heat e-liquid containing nicotine and other chemicals to create aerosols.

Thus, e-cigarettes are not subject to excise tax as per the regulations.

Which entity is required to pay excise tax in Vietnam?

Based on Article 4 of the Law on excise tax 2008 which provides specific regulations as follows:

- Persons required to pay excise tax are organizations and individuals producing, importing goods, and providing services that are subject to excise tax.

- In cases where organizations or individuals conducting export business purchase goods subject to excise tax from manufacturing establishments for export but sell them domestically instead, those conducting export business are the entities required to pay excise tax.