Import tariff cuts are not significant
03 January 2012
In principle, import tariff reductions for consumer electrics, electronics and information technology products would make products cheaper and more saleable. However, distributors say the import tariff cuts will not have big effects.
Since 1 January 2012, the tariff on these kinds of products have reduced by 4% - 10% under the plan to cut tariffs gradually within the framework of the ASEAN’s free trade agreement AFTA, the ASEAN-China free trade agreement and the ASEAN-Republic of Korea free trade agreement.
The product items and the tariff cuts have been stipulated in Circulars No. 161, 162 and 163 issued by the Ministry of Finance on 17 November 2011.
Portable electric fans, box fans, wall fans, ceiling fans; air conditioners, refrigerators, and washing machines have seen the tariff drop down from 20% to 15%. However, for vacuum cleaners and floor polishers it’s dropped from 20% to 10%. Microwaves and quick water heaters enjoy a drop from 15% to 10%, whilst webcams and cameras drop from 10% to 5%. Meanwhile, kitchenware and household goods change from 25% to 15%.
However, within the AFTA in 2012, information technology products will have the import tariff at 0%.
Computer distributors say that consumers would get no benefits from the new tariff cuts. Most of the computer imports are from China, but under the roadmap of tariff cuts within the framework of the ASEAN-China trade agreement, a lot of imports from China have enjoyed the zero tax tariffs already.
It is argued that importers need to prove that the import consignments, for example, computer products, are sourced from China (form E- certificate of origin C/O), to enjoy the zero tax rate.
“The tariff on mobile phones from China was cut to 0% one year ago,” said Vu Hoang Huu, Director of VHH Company.
Doan Hong Viet, Director of DigiWorld, specialising in importing computers, added: “Except for a few consignments of computers imported from non-regional countries, such as from the US or Europe, which impose the tax of 3%, other imports come from China. Therefore, we do not bear import tax.”
Meanwhile, electronics, household electrics and refrigeration products sourced from ASEAN have been enjoying the tax rate of 5% for the last four years. Big electronics manufacturers such as Panasonic, Sharp, Sanyo, Sony and Hitachi all have their factories set up in ASEAN countries; therefore, their exports to Vietnam can enjoy preferential tariffs.
Since most of these kinds of products available in Vietnam are the imports from ASEAN, Vietnamese consumers have already been purchasing reduced-priced products.