Vietnamese garment companies are ready to compete with imported products under a new import tax preferential list instituted on September 15, says Le Quoc An, chairman of the Vietnam Textiles and Apparel Association (Vitas).
The preferential list is applied to 117 groups of products, with Vietnam commitment to reducing and cutting the import tax on both garment material and finished garment products seen as a great disadvantage for domestic enterprises.
Domestic businesses, however, also would benefit from tax reduction, An said.
Vietnamese apparel makers must import as much as about 70 per cent of their fabrics, accessories, machinery, technology and chemicals. Reducing and cutting the tax for imported materials would help enterprises reduce production costs, enhancing their competitiveness.
The application of the preferential tax list would benefit both producers and consumers because it results in cheaper products, said Ninh Ngoc Nam, sales manager of the Thai Tuan Textile Co.’s Hanoi branch.
Garment companies were prepared for the application of the preferential tax list and the impacts of it would have on their revenue.
“We have invested a lot in building our distribution channels and our own trademarks,” Nam said. “With prestigious trademarks, the reduction of taxes [on competitors’ goods] will not drive our customers away.”
Vietnamese businesses also have long experience competing with illegally imported, inexpensive garments from China, so the tariff reductions won’t affect them seriously, An remarked.
Chinese garments were inexpensive but mass-produced. Vietnamese enterprises could focus on their design and trademarks and thereby maintain their competitiveness.
As for more expensive, upscale imported garments, the import tax reduction would not seriously affect domestic producers as these products held only small market shares.
Vietnamese garment companies successfully weathered a reduction in import taxes from 40 per cent to 10 per cent some years ago when the country began implementing its AFTA commitments. This time, with further tax reductions required by WTO commitments, Vietnamese garment producers were expected to make suitable changes to meet the challenge, An said.
VNS
Vietnamese
