Vietnamese electronics enterprises submitted a petition to the government to ask for an adjustment to import taxes on electronic components during a recent conference in Hanoi.
The Vietnam Electronics and Informatics Corporation (VEIC) pledged that when Vietnam joins the ASEAN Free Trade Area, it would decrease import taxation rates on wholly assembled electronic products to between 5-0 per cent beginning in 2006, exposing Vietnamese-made products to stiff competition from imports.
It said both local businesses and foreign-owned joint-venture companies could only compete if import taxes on most electronic components and accessories are significantly reduced or waived. They currently face import tax rates of 6-8 per cent, inclusive of a first-phase adjustment, 2 to 3 per cent higher than those-on-finished products imported from other ASEAN members, and up to 6 per cent higher than taxation rates adjusted according for localization quotas.
The industry has taken measures to stimulate the sector, including marketing new products, organizing discount programs, and revamping product ranges. But the VEIC said that without the taxation adjustment for the second phase of the agreement, many businesses would suffer substantial losses when competing with rival imports. The organization warned the prospects of factory closures, redundancies and bankruptcy were very real for some companies.
GfK forecast that sales of electronic goods, home appliances, IT equipment and telecom products in Vietnam this year will get close to US$1.9 billion, which would be a full third more than in 2004.
According to a very precise breakdown delivered at the market researchers’ fifth annual conference in Ho Chi Minh City on October 27, sales of telecom goods will end up at US$597 million, a rise of 59 per cent on 2004. Next will be home appliances, up 30 per cent to US$538 million, followed by other consumer electronics, up 9 per cent to US$417 million, and IT, up 36 per cent to US$340 million.
Reported sales in the first half were US$294.3 million for home appliances, US$270.8 million for mobile phones and US$218.7 million for other consumer electronics.
VNS, Vietnam Industrial Times
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