January 10, 2015
– As of January 1 this year, Vietnam has cut tariffs for thousands of items to fulfill commitments in several multilateral free trade agreements (FTAs) the country has signed.
In line with commitments to the ASEAN Trade in Goods Agreement (ATIGA) in 2015-2018, the Ministry of Finance has issued Circular 165/2014/TT-BTC slashing the import duties for 1,715 more tariff lines, including those for farm produce and fuel products, to zero from 5%. Together with 6,859 tariff lines removed between 2012 and 2014, the fresh cut has sent 90% of the tariff lines in ATIGA down to zero.
Specifically, Vietnam will cut 7% of tariff lines, or 669 items, including steel, paper, cloth, autos, auto components, machinery, equipment, building materials and furniture. However, the country has separate tax reduction road maps for two groups of sensitive commodities, namely auto-motorcycles and cigarettes. The import tax of 50% on autos and motorcycles is maintained this year but will fall to 40% next year, 30% in 2017 and 0% in 2018. Meanwhile, the import tariff for cigarettes still enjoys the most favored nation status.
Also, as of January 1, Vietnam has reduced the tariffs for imports from other markets, including China, India, South Korea and New Zealand, in line with the ASEAN-China Free Trade Area (ACFTA), the ASEAN-India Free Trade Area (AIFTA), the ASEAN-Korea Free Trade Area (AKFTA) and the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).
With ACFTA, Vietnam has pledged to cut 9,491 tariff lines and the average tax rate in 2015-2017 and in 2018 is 2.26% and 1.67% per year respectively. Under Circular 166/2014/TT-BTC, there are 3,691 tariff lines lowered to 0% from this year, bringing the percentage of tariff lines with a zero rate to 84.11%.
Under AKFTA, import tariffs on common products are removed in accordance with Circular 167/2014/TT-BTC. There will be an additional 340 lines slashed to 0% in 2016 and 478 more in 2018.
Similarly, import tax reductions and breaks are applied to many products imported from Australia and New Zealand from this year in accordance with AANZFTA and Circular 168/2014/TT-BTC.
With AIFTA, Vietnam will lower and eliminate tax rates of 6,722 out of 9,558 tariff lines, with the average rate of 7.38% per year between 2015 and 2018, down 2.15% from last year. Specific tariff lines are clarified in Circular 169/2014/TT-BTC.
In return, partners in these FTAs also eliminate tariffs for most of Vietnam’s imports in 2015-2018.
(The Sun Daily)