National Consultant to Review the Impact of Raising Excise Tax in Vietnam

Local Health System Sustainability (LHSS) Vietnam

A NATIONAL CONSULTANT

To undertake a review on the impact of raising Excise Tax in Vietnam,
with a particular reference for additional financing of the health sector

I. BACKGROUND

1.1. Local Health System Sustainability (LHSS) Project in Vietnam

The global USAID LHSS project helps low- and middle-income countries transition to sustainable, self-funded health finance systems that support high-performing overall health systems. The LHSS activity in Vietnam will work with the Government of Vietnam (GVN) to advance greater local ownership of HIV and TB prevention and control. Led by Abt Associates, the four-year activity will support Vietnam in increasing its domestic financing for HIV and TB services in the context of declining donor funding, in using government resources more efficiently, and in assuming local ownership of HIV and TB prevention and control activities. Specific objectives are: (1) Support the GVN to strengthen its public financial management systems for public sector health and find greater efficiencies in social health insurance (SHI), (2) Increase and improve the efficiency of domestic financing of HIV prevention and treatment services; (3) Strengthen the capacity of Vietnam's supply chain management system; and (4) Integrate TB services into SHI.

1.2.   Context of the assignment

From 2010-2018, Vietnam's healthcare expenditure per capita increased rapidly, from USD 76.6 in 2010 to USD 151.7 in 2018, or averagely by more than 24 percent a year, outpacing annual GDP per capita growth of more than 5 percent. Vietnam's current health expenditure was also the highest among ASEAN countries, averaging 6.5 percent of GDP a year. Though the spending in the health sector in Vietnam is higher than its regional peers, it shows a decreasing trend in recent years, from 6.3 percent of GDP in 2013 to 5.9 percent in both 2017 and 2018. Meanwhile, out-of-pocket expenditure in Vietnam in the same period has increased from 37.4 percent to 45.1 percent in total current health expenditure (World Bank).

Whereas the growth of healthcare spending along with economic growth is a common sign of developing economies, Vietnam is currently facing healthcare budgeting and expenditure choices: (i) State budget subventions for Vietnamese public hospitals is still too low to meet the demand and are unlikely to be increased given the context of fiscal consolidation in the country; and (ii) a need for Vietnam to consolidate, if not increase spending on the health sector to address the public's demand for health services, thus generate new sources of healthcare funding; and (iii) besides increasing the fiscal space to improve health care funding, identify efficiencies in current domestic health sector financing ^[1].

According to the current law on the excise tax of Vietnam, an excise tax is a tax that is applicable on specific goods and services that are (i) not encouraged due to their harmful effects on health, (ii) usually consumed by high-income consumers in the society, and (iii) are unnecessary services (National Assembly, 2008). The current law on the excise tax applies mostly to alcohol products, cigarettes, and expensive goods and services, such as planes, cruise boats, and cars. The general understanding is that raising the excise tax on addictive or pollutive properties such as tobacco and alcohol can support both discouraging consumption and increase tax revenue. However, the magnitude of this action and its potential to have additional financing for the health sector is currently not fully understood.

In this context, LHSS Vietnam is seeking a senior expert in public finance to assist LHSS Vietnam to conduct identification and analysis of the impact of an increased excise tax/portfolio of different taxes in Vietnam on state budget revenue and the potential of this increased fiscal space to allocate additional funding to the health sector.

Please refer to the attached TOR for more information.

1.3.   Objectives

The objectives of this assignment are to understand the current situation of the excise tax in Vietnam and investigate different scenarios if increased excise tax revenues would be made available to increase the funding for the health sector.

II.     MANAGEMENT OF THE ASSIGNMENT

The consultant will report to the Public Financial Management Lead at LHSS Vietnam. The consultant will also work closely with MOF, MOH, VSS, MPI, and other key government agencies as well as relevant partners, as needed.

III.   LOCATION AND TIMING

The expert's assignment is home-based in Hanoi, with regular consultation with the LHSS team in their offices, planned for the period from 1 April to 31 July 2021.

IV.   REQUIREMENTS

4.1.   Qualification requirements

• An advanced degree (minimum Master) in economics, finance, public policy, or equivalent, and have at least ten years of relevant work experience, particularly in public finance and health financing.
• Excellent knowledge of fiscal policy, state budget management, and key stakeholders in Vietnam, including experience with MOF, MOH, and VSS.
• Good understanding of the health sector in Vietnam.
• Demonstrated ability to work effectively with government counterparts and coordinate various actors such as different MOF, MOH, VSS units, other ministries, government agencies, donors, and NGOs.
• Excellent oral and written communication skills in Vietnamese. Good English communication is desirable.

4.2.   Equipment

The consultants use his/her computer and equipment as necessary to carry out the work.

To apply, please send your application documents to the following email:

[email protected]

Deadline: 26^th March 2021

Only short-listed candidates will be contacted for interviews.