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Impacts of higher tobacco tax on output and employment in Vietnam


Nguyen, HTT and Giang, LT and Pham, TN, Impacts of higher tobacco tax on output and employment in Vietnam, Journal of Economics and Development pp. 1-16. ISSN 1859-0020 (2020) [Refereed Article]

Copyright Statement

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

DOI: doi:10.1108/JED-11-2019-0058


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.

Item Details

Item Type:Refereed Article
Keywords:employmen, output, tax policy, tobacco control, Vietnam
Research Division:Human Society
Research Group:Policy and administration
Research Field:Economic development policy
Objective Division:Expanding Knowledge
Objective Group:Expanding knowledge
Objective Field:Expanding knowledge in economics
UTAS Author:Giang, LT (Associate Professor Long Giang)
ID Code:138882
Year Published:2020
Deposited By:Menzies Institute for Medical Research
Deposited On:2020-05-07
Last Modified:2020-07-31

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