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Contraband cigarettes totaled 1 billion packs in 2014

Released at: 18:06, 16/06/2015

Contraband cigarettes totaled 1 billion packs in 2014

Efforts continue but smuggled cigarettes still arriving in Vietnam in large quantities.

A report of the Vietnam National Tobacco Corporation (Vinataba) said that contraband cigarette smuggling hits the State budget by around VND10 trillion ($46.5 million) each year and means there are some 1.5 million less people employed in the industry.

Mr. Bui Nhat Tien, Deputy General Director of Vinataba, told VET that in 2014 the amount of contraband cigarettes in the country increased 30-40 per cent compared with 2013, totaling over 1 billion packs.

Contraband cigarettes are easily found in most cities and provinces around the country, increasing in both volume and brand names. Previously, smuggled tobacco was primarily the HERO and JET brands, at VND14,000 ($0.64) to VND18,000 ($0.83) a pack, but recently many other cheap, poor quality cigarettes have also appeared, such as League, Luxury, Cambo, Ram, and Rainson (priced from VND2,700 ($0.12) to VND4,000 ($0.18) a pack), Mine and Gem, at VND4,000 ($0.18) a pack, Golden Deer, at VND5,000 ($0.23) a pack, and Elephant, VND5,500 ($0.25) a pack.

According to a survey by Oxford Economics in 2014, Vietnam was the biggest market for contraband cigarettes among the 14 countries and territories surveyed in Asia (the others were Indonesia, Thailand, Cambodia, Taiwan, Laos, Australia, the Philippines, Singapore, Myanmar, Pakistan, Hong Kong, Malaysia, and Brunei).

Contraband cigarettes avoid various types of taxes, includes the specific tobacco tax (65 per cent), VAT (10 per cent), import tax (135 per cent), and a tax that goes to the fund for preventing tobacco harm (1 per cent), which makes them much cheaper than legitimate cigarettes produced locally.

The also lack health warnings and there is no official control over their tar and nicotine content.

In 2014 the government established the 398 National Committee on preventing contraband, smuggling, commercial fraud, and counterfeiting. Moreover, the Prime Minister issued Directive No. 30 / CT-TTg on strengthening the fight against cigarette smuggling, while other legal documents have also been introduced to stop contraband cigarettes from arriving in the country.

The actions of the government have seen some positive results. From October 2014 to March 2015 the number of contraband cigarette packs seized stood at some 5.1 million, a 45 per cent increase compared with October 2013 to March 2014.

Hung Nguyen

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