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Illicit Cigarette Consumption and Government Revenue Loss in Vietnam: Evidence from a Primary Data Approach

Author

Listed:
  • Minh T. Nguyen

    (Department of Economics, Ball State University, Muncie, IN 47306, USA)

  • Son The Dao

    (Department of Economics, Thuongmai University, Hanoi 10000, Vietnam)

  • Nga Que Nguyen

    (Vietnam Academy of Social Sciences, Hanoi 10000, Vietnam)

  • Mike Bowling

    (Department of Health Behavior, University of North Carolina-Chapel Hill, Chapel Hill, NC 27599, USA)

  • Hana Ross

    (School of Economics, University of Cape Town, Rondebosch 7700, South Africa)

  • Anthony D. So

    (Innovation+Design Enabling Access (IDEA) Initiative, Department of International Health, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD 21205, USA)

Abstract

This article provides the first comprehensive picture and independent estimates of both illicit cigarette consumption and the resulting government tax revenue loss in Vietnam using data from a representative survey of cigarette smokers in 12 Vietnamese provinces. The survey consisted of face-to-face interviews and on-site cigarette pack examinations. We find that more than 720 million illicit cigarette packs, or 20.7% of total cigarette consumption, circulated in Vietnam in 2012. Consequently, government tax revenue loss due to illicit trade ranged from US $223 to 295 million. Our estimates also indicate that (1) the most popular illicit brands were Jet and Hero, both were sold at higher prices than the average legal brand; (2) the average price of illicit cigarettes was 51% higher than the average price of legal cigarettes; and (3) majority of illicit cigarettes were sold at convenience stores, which were registered and licensed businesses. Our findings suggest that prices are not a driver of illicit cigarette consumption in Vietnam, and this illicit trade is at least partially a consequence of weak market control enforcement.

Suggested Citation

  • Minh T. Nguyen & Son The Dao & Nga Que Nguyen & Mike Bowling & Hana Ross & Anthony D. So, 2019. "Illicit Cigarette Consumption and Government Revenue Loss in Vietnam: Evidence from a Primary Data Approach," IJERPH, MDPI, vol. 16(11), pages 1-12, June.
    • Handle: RePEc:gam:jijerp:v:16:y:2019:i:11:p:1960-:d:236605
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    Citations

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    Cited by:

    1. S. M. Abdullah & Rumana Huque & Linda Bauld & Hana Ross & Anna Gilmore & Rijo M. John & Fiona Dobbie & Kamran Siddiqi, 2020. "Estimating the Magnitude of Illicit Cigarette Trade in Bangladesh: Protocol for a Mixed-Methods Study," IJERPH, MDPI, vol. 17(13), pages 1-14, July.
    2. Vaida Liutkutė-Gumarov & Lukas Galkus & Janina Petkevičienė & Mindaugas Štelemėkas & Laura Miščikienė & Aušra Mickevičienė & Justina Vaitkevičiūtė, 2020. "Illicit Tobacco in Lithuania: A Cross-Sectional Survey," IJERPH, MDPI, vol. 17(19), pages 1-15, October.

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