New preferential import tariff for 3 groups of construction steel products, including reinforced concrete; Angle, mold, profile and flat rolled non-alloy steel can be reduced by 5-10%.

The Ministry of Finance has just completed a summary report explaining and receiving comments from ministries, sectors, localities, associations and enterprises on the draft Decree amending and supplementing a number of articles on the export tariff and tariff schedule. preferential import, the list of goods and the absolute tax rate, mixed tax, import tax outside the tariff quota.

Accordingly, this draft Decree will amend and supplement a number of articles of Decree No. 57/2020/ND-CP; amending and supplementing a number of articles of Decree No. 122/2016/ND-CP of the Government and Decree No. 125/2017/ND-CP amending and supplementing a number of articles of Decree No. 122/2016/ ND-CP,

In which, adjusting the preferential import tax rate (MFN) for some steel products and the export tax on steel billet is one of the main contents of the draft Decree.

STEEL IMPORT TAX CAN BE REDUCED FROM 5-10%

Regarding the preferential import tariff for steel products, the Ministry of Finance proposes to reduce the import tax rates for 3 groups of reinforced concrete products; angle, mold, profile and flat rolled non-alloy steel from 5%-10%.

Specifically, the group of reinforced concrete in group 72.13,72.15 is expected to be reduced from 20% to 15%; angle, mold and profile steel of heading 72.16 and toothed tooth steel of heading 72.13 shall be reduced from 15% to 10%; Flat-rolled non-alloy steel group of 8 product codes of group 72.10 is reduced from 20%, 25% to 15% depending on type.

According to the explanation of the Ministry of Finance, the above tax reduction has two main reasons.

Firstly, currently the import tax rate of construction steel is about 15%-20%, which is a high level of protection and has been implemented for a long time.

Secondly, the reduction of import tax will contribute to lowering the price of steel products, stabilizing the macro-economy, and removing difficulties for construction and investment enterprises under the direction of the Government in Resolution No. 58/ NQ-CP and Resolution No. 63/NQ-CP.

Responding to this proposal, the Vietnam Steel Association said it disagreed and proposed not to reduce import tax on construction steel products.

Previously, in the report on this draft, the Ministry of Finance assessed that the implementation of tax reduction according to the plan expected to reduce the state budget revenue is not large because the wire is the type of steel that can be produced in the country and the base version that meets the needs.

According to the Ministry of Finance, the adjustment according to the proposed plan will promote domestic steel manufacturing enterprises to invest and innovate technology to reduce product costs and increase competitiveness for imported steel products. exports, contributing to stabilizing the domestic iron and steel market price.

In addition, this also promotes domestic steel manufacturing enterprises to invest and innovate technology to reduce product costs, increase competitiveness for imported steel products, and contribute to stabilizing market prices. domestic iron and steel market.

And in the above report, the Ministry of Finance continued to maintain its point of view, with comments received, explaining that: “Currently, the import tax rate of construction steel is about 15-20%. This is the guaranteed level. At the same time, in order to contribute to lowering the price of steel products, stabilizing the macro-economy, and removing difficulties for construction and investment enterprises, follow the direction of the Government. The Government in Resolution No. 58/NQ-CP and Resolution No. 63/NQ-CP, the Ministry of Finance has calculated a reasonable reduction to harmonize the interests of consumers and producers and ensure a reasonable difference. with input materials”.

STEEL STEEL PROJECTS STILL ENJOYING 0% EXPORT TAX

Also in this summary report, the Ministry of Finance said that after receiving comments from relevant units, the proposed steel billet will continue to enjoy the export tax rate of 0%.

In the previous proposal, billet products (in heading 72.06 and 72.07) are expected to have an export tariff increase from 0% to 5%.

The imposition of export tax on this item has received many feedbacks and suggestions from ministries, branches, localities, VCCI as well as a number of related businesses. In particular, the vast majority of opinions disagree with this tax increase.

Specifically, the Ministry of Industry and Trade proposed not to apply tax increases in the context of being impacted by the COVID-19 epidemic, steel manufacturing enterprises and enterprises in the supply chain face many difficulties. This should only be considered when there is a shortage of domestic supply.

Sharing the same view with the Ministry of Industry and Trade, the Steel Association and many manufacturing enterprises such as Hoa Phat Steel Company, Formosa Company, Nghi Son Iron and Steel all objected to the increase of export tax on billet and proposed to maintain the current policy. onion.

Meanwhile, the Vietnam Chamber of Commerce and Industry (VCCI) asked the Ministry of Finance to re-evaluate the cause of the high steel price, thereby reviewing and developing an adjustment plan accordingly.

Previously, VCCI also stated that the domestic supply of steel billet is not lacking and the increase in export tax is unlikely to reduce the domestic billet price. Therefore, according to VCCI, the increase in export tax is unlikely to affect the price of finished steel as the initial target.

The only locality that submitted a petition, Nam Dinh, said that this adjustment of tax rate should be carried out according to the roadmap so that domestic enterprises have time to adjust their investment and business plans accordingly.

However, the high steel price has greatly affected the progress and disbursement as well as the contingency costs of projects, especially public investment projects. Besides, the increase in steel price also affects input costs of many manufacturing businesses.

Accordingly, in order to contribute to lowering the price of construction steel products, promoting businesses to reduce costs, especially in the context of high raw material prices, the Ministry of Finance has planned to adjust the export tax rate for the products. with billet products and MFN import tax rates of some iron and steel to submit to the Government.

Previously, according to the Ministry of Finance, the domestic construction steel price has continuously increased sharply in recent years, mainly due to the high price of raw materials for steel production while the steel industry depends largely on imported materials.

However, the high steel price has greatly affected the progress and disbursement as well as the contingency cost of projects, especially public investment projects. Besides, the increase in steel price also affects input costs of many manufacturing businesses.

Accordingly, in order to contribute to lowering the price of construction steel products, promoting businesses to reduce costs, especially in the context of high raw material prices, the Ministry of Finance has made a plan to adjust the export tax rate for export tax. with billet products and MFN import tax rates of some iron and steel to submit to the Government.

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