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Vietnam to Lower Import Taxes, Ease Price Pressure

Vietnamese import taxes on key commodities will drop between 30 and 60 percent this week following a proposal by the Ministry of Finance to curb inflation.

As proposed to the government by the ministry, the new tariffs are set to take effect on August 8. The new tariffs are designed to compel competitive pricing.

Truong Chi Trung, deputy finance minister, said last week that tax cuts on food, foodstuff, animal feed and construction materials – all goods whose prices have skyrocketed recently – would be only temporary.

Meanwhile, a permanent reduction would be imposed on import tariffs of completely-built automobiles, secondhand-vehicles, cosmetics and electronics items.

Under the ministry’s new tax framework, import duties on pork, beef and other kinds of red meat would drop from 30 to 12 percent.

Poultry eggs set to enjoy the new tariffs of 12-20 percent from the current 20-40 percent rates. And vegetable oil taxes will be lowered to 15-20 percent from 20-50 percent.

Products for infants are subject to lowered duties of 7-30 percent instead of the current 10-40 percent.

To take pressure off farmers, the ministry plans to halve import levies on animal feed, corn and bran, which are currently taxed 5-10 percent, said Trung.

It is also set to bring down taxes on steel products from 10-12 percent to 5–10 percent; steel ingots from 5 percent to 2 percent; and construction materials from 10-12 percent to 8–10 percent.

Import duties on vegetables and fruits will be subject to cuts as well.

Permanent cuts

Completely-built automobiles will see a 10 percent drop in import tax to 70 percent.

The ministry is expected a reduction of 5 percent in the absolute tax on secondhand cars, the second time the tariff has been lowered since the country’s formal entry into the WTO earlier this year.

Import levies on electronic items like air-conditioners, refrigerators and cosmetics will be cut to 30 percent from the current 40 percent.

Trung said the ministry will allow firms extended time to pay value added taxes for imported agriculture products, in a bid to help them to cut their expenses.

Price monitoring on import items, circulation and retail sales would be tightened to avoid speculation.

The State Bank of Vietnam said it would maintain the basic interest rate for Vietnam dong, while requiring a higher compulsory reserve ration to ease the pressure on prices.

The government will buy foreign currencies to increase the foreign currency reserve while issuing government bonds and pushing up investments.

The country’s consumer price index (CPI) rose to 8.4 percent in July from 7.8 percent in June due to higher costs of food, housing and medicine.

Price hikes pushed inflation further away from the government's initial goal of keeping annual inflation this year below 7 percent.

The Finance Ministry recently revised its 2007 inflation forecast to 7.5-8.2 percent after faster-than-expected price growths in May and June.

The General Statistics Office estimated that consumer prices have risen 6.2 percent in the first seven months, compared to 6 percent expected early this year.

Consumer prices are expected to rise 1.4 percent this month after an estimated 0.94 percent jump in July – the highest monthly increase so far this year.

However the ministry believed that the new tariffs would significantly reduce CPI soon and force local producers to provide competitive products.

được đăng bởi kude.punny @ 22:11