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Impacts of higher tobacco tax on output and employment in Vietnam

journal contribution
posted on 2023-05-20, 14:08 authored by Nguyen, HTT, Long GiangLong Giang, Pham, TN
Purpose: The purpose of this study was to evaluate how higher tax on tobacco would influence output and employment in Vietnam.

Design/methodology/approach: The authors used micro-simulation techniques proposed by Walbeeck (2010). Both national data (from Input–Output Table) and household data (Vietnam Household Living Standard Survey) were utilized.

Findings: The results showed that any increase in the excise tax for tobacco would have positive net impacts on both national output and employment. The tobacco industry would not be significantly affected due to its small contribution to national economy and employment. More importantly, money released from reduced tobacco consumption would be reallocated to other goods and services, and thus outputs and jobs in nontobacco sectors would increase.

Research limitations/implications: The key limitation of this study was due to unavailability of updated data, especially Input–Output Table as well as household living standard survey.

Practical implications: This study concluded that government should increase tax on cigarette along with a well-planned roadmap to avoid unexpected consequences on income and employment of laborers in this sector.

Originality/value: This study replicated a popular approach in order to verify an important government policy (i.e. effect of tax on tobacco on output and employment) under Vietnamese context.

History

Publication title

Journal of Economics and Development

Pagination

1-16

ISSN

1859-0020

Department/School

Menzies Institute for Medical Research

Publisher

Emerald Publishing Limited

Place of publication

United Kingdom

Rights statement

© Hien Thu Thi Nguyen, Long Thanh Giang and Toan Ngoc Pham.

Repository Status

  • Restricted

Socio-economic Objectives

Expanding knowledge in economics

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