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Saturday, August 20, 2022

Ten new decrees guiding FTA tariff cuts

Updated: 16:38’ - 09/01/2018
The Ministry of Finance on January 5 announced 10 draft decrees that will guide implementation of several free trade agreements (FTAs), drawing a roadmap to zero percent import tariffs for many goods.

The Ministry of Finance on January 5 announced 10 draft decrees that will guide implementation of as many free trade agreements__Photo:

The road map, beginning this year, will extend until 2022 for several goods and commodities for which the tariffs will undergo a gradual progression.

Accordingly, the 10 draft decrees on Vietnam’s special preferential import tariffs include the ASEAN Free Trade Area; FTAs between ASEAN and Japan, India, Australia - New Zealand, the Republic of Korea (RoK) and China; and between Vietnam and the RoK, Japan, Chile and the Eurasian Economic Union.

The new decrees aim to ensure stability in the application of special preferential import tariffs, said Pham Tuan Anh, Deputy Head of the Ministry of Finance’s Department of International Cooperation.

They will also make it easier for businesses to follow regulations, he added.

Since 2015, a series of imported goods and commodities to Vietnam have received tax reductions under FTAs’ commitments. As committed, the tariffs will be cut further during 2018-22. On many, the drop to zero percent happens this year.

The finance ministry has calculated the average tariff reduction rates each year for the 10 FTAs.

Under the Vietnam - Eurasian Economic Union FTA, for instance, 5,535 tariff lines will be cut to zero percent, while gradual reduction will apply to 3,720 tariff lines, including milk and dairy products, automobile and auto parts, steel and steel products.

Seafood, wheat, confectionery, diesel fuel, machinery and electronic equipment are some of 704 tariff lines that will be cut to zero percent this year under the Vietnam - South Korea FTA.

Meanwhile, the Vietnam - Japan Economic Partnership Agreement will see 456 tariff lines cut to zero percent, including sugar, construction stones, machinery, steel, aluminum and vehicle parts.

While the application of new import tariffs during the 2018-2022 period will reduce the import tax revenues, it will not have negative impacts on state budget collection, Tuan Anh claimed.

He said the tariff lines were set on the basis of FTA commitments, the schedule of which has not changed. In fact, domestic enterprises stand to benefit from tariff preferences because their inputs cost will decline and production and business efficiency will improve.

This, in turn, would raise domestic tax collection and offset the reduction in import tax revenues, he said.- (VNS/VLLF)

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