MoF Proposes New Import Tariff Rates on Electronic Products

MoF Proposes New Import Tariff Rates on Electronic Products

The Ministry of Finance has recently proposed adjustments to the parts import tax, favoring a higher tax on electronic parts that local firms could produce and a low tax on parts that local firms cannot produce.

Accordingly, the country will impose an import tax rate of 15-30 per cent on locally produced and competitive electronic products, 0-10 per cent on products that are difficult to produce in Vietnam or don’t have competitive advantages and 20-30 per cent on locally produced and competitive subsidiary parts.

The new import tariff tax rates will help electronics firms compete in a market made increasingly aggressive by ASEAN tax concessions.

Electronics companies will have to face stiff competition when products from ASEAN members flood Vietnam’s market following tax breaks, said Hoang Viet Dung, Vice President of the Vietnam Electronic Industries Association (VEIA).

Sung Nak Kil, General Director of LG Electronics Inc in Vietnam, said that policies should stimulate electronic producers and provide a higher local content on locally produced electronics.

Vietnam currently applies an import tax rate of 20 per cent on complete-built-unit (CBU) products, but that will drop to 10 per cent by early next year and then to 5 per cent by the end of next year under commitments within the ASEAN Free Trade Agreement.

Parts import taxes, however, will remain relatively high at 20-30 per cent, driving firms to favor CBU products rather than establish assembly and production bases in Vietnam.

Investment, VietNamNet