The tax rate of a flat TV screen was cut from 15 per cent to five per cent. Tax rates on other types of TV screens were cut by between 10 and 15 per cent. The tax rate of black and white TV screen alone is put at 10 per cent. The tax rate was cut from five per cent to three per cent for TV transformers and from 20 per cent to ten per cent for speakers. The fact that the Ministry of Finance decided to adjust import tax rates on some electronic accessories may be a positive sign for local electronic manufacturing and assembly enterprises in the early months of this year.
Also, some items, mainly imports such as electronic tubes, have had their tax rate cut from 20 per cent to between 0 and 15 per cent. Some other accessories and spare parts, such as covers for lamps and cathode ray tubes, now have import tax rates standing at between 0 and five per cent.
In this import tax adjustment, some important electronic accessories and spare parts have had their tax rates cut to between 0 and 20 per cent. In particular, tax rates of accessories and spare parts imported from outside ASEAN saw a sharp fall.
Even though only import tax rates of accessories were cut, according to experts, this will create a favourable condition for local enterprises to develop their production and business activities in competition with other manufacturers in the region.
According to the Ministry of Finance, the adjustment of import tax rates of accessories aims at helping reduce input costs for local manufacturing and assembly enterprises, thus helping them cut their prices to compete against products imported from other ASEAN countries. This tax adjustment, according the ministry, will meet the proposal on import tax cuts made by local electronic enterprises months ago and is suitable with the roadmap for import tax cut for electronic products originating from ASEAN countries as in the CEPT/AFTA agreement which took effect from January 2006.
According to the Vietnam Electronic Enterprises’ Association, an import tax cut for accessories will produce effects on local enterprises, in particular, foreign-invested ones. This is a proper step to help local enterprises improve their competitiveness, creating an equal competition environment among local electronic enterprises and encouraging foreign-invested enterprises to expand their activities in Vietnam. Also, this step fits Vietnam’s future accession to the World Trade Organisation (WTO).
However, some enterprises are still concerned about adjusted tax rates. According to their calculations, despite a sharp fall in import tax rates, the average import tax rate of accessories for a television is still at six per cent, higher than that of five per cent of import tax rate for a television set imported from ASEAN countries. However, the Ministry of Finance said that the tax rate adjustment had been made based on careful calculations, taking into account the encouragement of the use of locally-made accessories while minimising negative impacts on Vietnam’s WTO bid negotiations.
Quynh Chi
Vietnamese
