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Economic News

Last updated: Friday, March 22, 2019

 

7,819 Tariff Lines from Hong Kong to Be Removed

Posted: Monday, December 17, 2018


To fulfil Vietnam’s commitments on import tariffs under the ASEAN - Hong Kong Free Trade Agreement (AHKFTA), the Ministry of Finance drafted a decree proposing the Government to introduce specially preferential import duties in 2019 - 2022. Accordingly, if adopted, 72 per cent of AHKFTA tariff lines, or 7819 tariff lines, will be eliminated from 2019 to 2022.

According to the Ministry of Finance, AHKFTA negotiations were started in 2014 and wrapped up with a signing ceremony in November 2017 in the Philippines. In order to carry out Vietnam's commitments on import duties under AHKFTA, the Ministry of Finance drafted a decree on preferential import tariffs of Vietnam in 2019-2022, which was submitted to the Government for promulgation.

As Vietnam’s commitments to AHKFTA tariffs were entered into by ASEAN Harmonised Tariff Nomenclature (AHTN) 2012 and 2017, the Ministry of Finance changed AHKFTA tariff nomenclature from AHTN 2012 to AHTN 2017 to lay the groundwork for issuing Vietnam’s preferential import tariffs from 2019 to 2022 under AHKFTA. Accordingly, 83 commodity lines will be affected by changes of commodity codes and line separations. For these lines, the ministry builds tariffs in the principle that do not undermine international commitments under the WTO's transformation modalities. It, at the same time, ensures feasibility in implementation.

AHKFTA tariffs are based on the principle of complying with Vietnam’s commitments to tariff reductions under AHKFTA. Overall, AHKFTA tariff nomenclature under AHTN 2017 in 2018 - 2022 includes 10,856 tariff lines, including 10,775 tariff lines of the 8-digit level and 81 tariff lines of at the 10-digit level. The roadmap for tariff reduction is applied in four phases: From January 1 to December 31, 2019; from January 1, 2020 to December 31, 2020; from January 1, 2021 to December 31, 2021; from January 1, 2022 to December 31, 2022. In general, the country’s commitments under AHTN 2017 are higher than those under AHTN 2012 but the ratio of each category to total tariffs is almost unchanged. The ratio of tariffs eliminated under AHKFTA in 2019 - 2022 is about 72 per cent of AHKFTA tariff lines (or 7,819 tariff lines) with an import value of US$658.7 million. In 2019 - 2022, the AHKFTA average tariff rate will fall from 6.97 per cent in 2019 to 4.98 per cent in 2022. The biggest change is seen in 2021, with the average tariff falling from 6.52 per cent in 2020 to 4.98 per cent in 2021, which corresponds to a decrease of VND63.8 billion in import duties (assuming that import value is equivalent to Vietnam’s import value from Hong Kong in 2017).

L.H








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