Addressing the harmful use of alcohol - WHO Western Pacific Region

Addressing the harmful use of alcohol : A guide to developing effective alcohol legislation
volumes and absolute alcohol content of products, powers of inspection and administrative
procedures are generally set out in regulations.
A complicating factor in comparing alcohol excise duty rates is that countries may be phasing
out tariffs as part of their obligations under trade agreements (see above) and reconsidering
their domestic excise duty policies on alcohol to ensure equal treatment of imported and
domestically produced alcohol. Alcohol excise duty rates in other jurisdictions, such as
Australia and a number of American states, may also be in flux as governments address
anomalies or move to raise rates for public health reasons.
Changes to import tariff regimes as a result of trade agreements are an opportunity to
reconsider the rates at which a new or existing excise duty is set. Often the key consideration
is to safeguard the existing level of government revenue from this source. However, another
important consideration is the direct fiscal costs to government of alcohol-related harm,
particularly in countries where alcohol consumption is rising. As a consequence, governments
may wish to consider calculating the direct cost associated with alcohol-related harm when
considering tax rates and tax collection systems for alcohol, and setting tax rates at a level
which allows a government to recover its direct costs associated with this harm.
Direct costs include emergency, hospital and health services, policing and traffic control,
monitoring and enforcement of alcohol laws, including taxation. Social costs are more difficult
to quantify. Governments also need to take into account the costs of alcohol harm that are
not met directly from their own budgets but nevertheless have tangible economic impacts on
households and businesses. These might include the costs of lost earnings, lower productivity
due to absenteeism, and the costs that crime and road traffic accidents also impose on
households. These are real costs but are not part of the government’s budget.
The trend internationally is towards setting alcohol excise rates that reflect the alcohol content
of different alcohol products or beverage types (Thamarangsi et al. 2006), rather than rates
based on wholesale or retail price. The excise duty on spirits is typically higher because
production costs in relation to the alcohol-by-volume are lower than for other beverages. In
some countries, such as China, this may be because the government wishes to discourage a
troublesome tradition of heavy spirits drinking.
In 2008, as part of stronger alcohol policy, Viet Nam replaced alcohol excise duty rates that
varied for different alcohol products with rates based on alcohol content, to be raised over
the next few years. By 2013 there will be a 50% excise duty on spirits above 40% alcohol by
volume (ABV) and on beers of all types, and 25% excise duty on other alcohol products below
20% ABV (Hanh 2009; Viet Nam-Sweden Health Corporation Program 2007).
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