At a seminar to discuss amendments to the Law on Excise Tax on April 11, cigarette companies and the Vietnam Tobacco Association said that increasing excise tax on tobacco was essential but should not be done next year since smuggling was rampant.
An expert said that the hike must be affected no earlier than 2016 and the tax rate must not be above 80 percent.
But the Ministry of Finance (MOF) and Ministry of Health (MOH) rejected their arguments, saying the time has come to increase the tax.
The MOF plans to increase the tax on tobacco products by 10 percentage points to 75 percent by July 2015, and by another 10 percent in 2018.
It considered and rejected a second plan involving a combined excise tax of VND 500 per pack. However, it said it would continue to talk to companies and business groups.
It will submit draft amendments to the Government next month and the National Assembly in October. If approved, the amendments will take effect in July 2015.