The Vietnam Chamber of Commerce and Industry (VCCI) believes that the argument for raising steel billet tax to keep domestic production is not convincing because the domestic market does not seem to be short of billets.
In mid-July, the Ministry of Finance announced the draft adjustment of the export tax rate of steel billet from 0% to 5%.
The intended purpose of this regulation is to limit the export of steel billets to keep domestic production, thereby stabilizing the supply of steel billets for the domestic market, stabilizing prices in the market.
However, the Vietnam Chamber of Commerce and Industry (VCCI) said that the above argument is not convincing because the domestic market does not seem to lack steel billets.
Accordingly, Vietnam’s steel billet production capacity is growing well, with a capacity of 24 million tons/year. In 2020, steel billet output reached 17.21 million tons, and in the first 4 months of 2021, output reached 7.13 million tons, up 35% over the same period in 2020.
At the same time, steel billet imports tend to decrease sharply. Accordingly, imports in 2020 decreased by 97.5% compared to 2019, to $ 1.2 million; In the first 5 months of 2021, the import value dropped sharply to only 252,000 USD.
The above figures show that there is no shortage of domestic steel billet supply, and therefore an increase in export tax rate is unlikely to reduce domestic billet prices, thereby making it difficult to reduce the price of finished steel as the target. initial.
Meanwhile, the increase in tax rate can directly affect the price and profit of the export orders of steel billet manufacturers.
Therefore, VCCI proposed the drafting agency to re-evaluate the causes leading to the high price of construction steel, and at the same time review and comprehensively evaluate the impact of tax adjustment on steel billets, thereby developing a method appropriate adjustment.
Previously, the Vietnam Steel Association (VSA) said that the proposal to increase export tax on steel billet of the Ministry of Finance was not appropriate.
Accordingly, since the outbreak began at the end of April 2021 until now, the situation of the COVID-19 epidemic has been very complicated, many localities across the country have implemented social distancing in accordance with the Directive. 16, Directive 15 of the Government halted basic construction activities from industrial to civil, and domestic steel consumption dropped sharply.
“The promotion of export market expansion is very necessary, helping to boost production, improve investment efficiency, create jobs for hundreds of thousands of workers, then the opportunity to export finished steel products is very important. This is good, helping to earn foreign currency revenue and diversify the market for businesses,” VSA said.
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