With the aim of enhancing public health protection and encouraging environmental sustainability, on June 14, 2025, the National Assembly officially enacted Law No. 66/2025/QH15 on Special Consumption Tax (“2025 SCT Law”), replacing the previous 2008 SCT Law. This new law introduces several key adjustments in tax rates and tax calculation methods applicable to goods deemed harmful to human health or the living environment. The key highlights are as follows:
I. Higher Special Consumption Tax (SCT) on products directly affecting public health
1. Increase in SCT rates for alcohol and beer, and additional specific tax on tobacco and cigars
a. For tobacco and cigars:
In addition to the current 75% ad valorem SCT, these products will also be subject to an absolute (specific) tax per unit, applied progressively from 2027 to 2031, as follows:
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Cigarettes (20 sticks/pack): increased by VND 2,000 per pack per year, reaching VND 10,000/pack in 2031;
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Cigars (20g/stick): increased by VND 20,000 per stick per year, reaching VND 100,000/stick in 2031;
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Loose tobacco, pipe tobacco, or other forms: increased by VND 20,000 per 100g or 100ml per year, reaching VND 100,000/100g or 100ml in 2031.
Thus, SCT payable on these products will be calculated as:
Total SCT payable = SCT (ad valorem method) + SCT (specific tax, if applicable)
Where:
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SCT (ad valorem) = Taxable value × Tax rate
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SCT (specific) = Taxable quantity × Fixed tax amount per unit
This revised structure will significantly increase the total SCT amount imposed on tobacco-related products.
b. For alcohol and beer:
The SCT rates will be increased progressively by 5% per year over a five-year period from 2027 to 2031, as follows:
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Alcohol ≥20% ABV: from 65% in 2026 to 90% in 2031
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Alcohol <20% ABV: from 35% in 2026 to 60% in 2031
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Beer: from 65% in 2026 to 90% in 2031
2. Sugar-sweetened beverages added to SCT-liable goods
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Beverages with sugar content exceeding 5g/100ml (according to official national standards) will be subject to SCT.
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This change aims to promote healthier consumption and reduce the risk of non-communicable diseases such as diabetes and cardiovascular conditions.
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Applicable SCT rates: 8% from 2027 and 10% from 2028 onward.
II. Adjustments to SCT on vehicles: Increase for gasoline cars, reduction for electric vehicles
1. Increased SCT for gasoline-powered vehicles
a. For passenger cars and four-wheeled vehicles (up to 9 seats), and passenger pickup trucks:
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SCT rate ranges from 35% to 150%, depending on engine displacement.
b. For double-cabin pickup trucks and VANs (with two or more rows of seats and fixed partitions between passenger and cargo areas):
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SCT increased by 3% per year from 2026 to 2029, specifically:
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≤2,500 cm³: from 15% (2026) to 24% (2029)
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>2,500 – 3,000 cm³: from 20% (2026) to 29% (2029)
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>3,000 cm³: from 25% (2026) to 34% (2029)
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2. Reduced SCT for battery-powered electric vehicles
To encourage the use of eco-friendly vehicles, battery-powered electric vehicles will benefit from lower SCT rates initially, with a gradual increase from March 2027, as follows:
a. Battery-powered electric vehicles with fewer than 24 seats:
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Passenger cars and 4-wheeled vehicles with up to 9 seats, and passenger pickup trucks:
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3% (2026) → 11% (March 2027)
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Vehicles with 10–16 seats, and double-cabin pickup trucks or VANs:
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2% (2026) → 7% (March 2027)
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Vehicles with 16–24 seats:
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1% (2026) → 4% (March 2027)
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b. Other electric vehicles (non-battery, under 24 seats):
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Retain the SCT rate of 5%–15%, depending on the specific vehicle category.
These adjustments are expected to drive the transition toward sustainable and eco-friendly mobility solutions.
III. Exemption of SCT on air conditioners under 24,000 BTU
Compared to the 2008 SCT Law (which taxed all air conditioners with capacity under 90,000 BTU), the 2025 SCT Law narrows the taxable scope by only applying SCT to air conditioners with capacity from 24,000 to 90,000 BTU.
This adjustment reflects the reality that smaller air conditioners have become essential household appliances and are considered more energy-efficient and environmentally friendly. Therefore, only larger-capacity units—those consuming more electricity—remain subject to SCT.
The 2025 Special Consumption Tax Law takes effect from January 1, 2026.
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