The government lost more than VND4.32 trillion (US$207.4 million) in tax revenues last year due to smuggling in of cigarettes, a tobacco industry insider said.
Pham Kien Nghiep, chief of the Vietnam Tobacco Association, said around 930 million packs were smuggled in last year, news website thoibaokinhtesaigon reported Tuesday.
The tax loss was 26 percent higher than in 2008, he said.
According to his association, the contraband accounted for around 20 percent of domestic cigarette sales.
The import tax on cigarettes was raised to 50 percent in 2011 from 30 percent earlier.
The law provides for criminal prosecution and imprisonment for selling, transporting, and even possessing cigarettes on which taxes have not been paid.
Offenders could get from six months to 15 years in jail.
On January 25 the government announced new measures to reduce tobacco use from 26 percent to 18 percent among people aged 15-24, from 47.4 to 39 percent among older people, and to under 1.4 percent among women by 2020.
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