Expected reduction of MFN import tax on some groups of goods

Issue revised decree in March 2025

According to the Ministry of Finance, It is necessary to adjust the MFN import tax rates for a number of goods to ensure fair treatment among Vietnam's comprehensive strategic partners.

Previously, in order to cope with the complicated and unpredictable developments of the world's geopolitical and economic situation, especially the changes in economic, trade and tariff policies, which have had a rapid, strong, profound and multi-dimensional impact on the global economy, investment and trade, including Vietnam, in Directive 06/CT-TTg of the Prime Minister dated March 10, 2025, the Prime Minister requested the Ministry of Finance to urgently submit to the Government the amendment of Decree 26/2023/ND-CP dated May 31, 2023 to adjust tax rates on a number of groups of goods to ensure harmony and rationality according to simplified procedures, to be completed in March 2025.

Dự kiến giảm thuế nhập khẩu MFN một số nhóm mặt hàng

The Prime Minister requested the Ministry of Finance to urgently submit to the Government the amendment of Decree 26/2023/ND-CP dated May 31, 2023 to adjust tax rates on a number of commodity groups to ensure harmony. Illustrative photo

Regarding the direction of adjusting Decree 26/2023/ND-CP, informing the press on the afternoon of March 25, 2025, Mr. Nguyen Quoc Hung - Director of the Department of Management and Supervision of Tax, Fee and Charge Policies (Ministry of Finance) - the unit in charge of amending the decree - said: The Ministry of Finance has reviewed all tax rates (MFN preferential import tax is the tax rate applied to countries in the WTO; special preferential import tax is the tax rate applied to countries with a Free Trade Agreement (FTA) with Vietnam; special consumption tax; environmental protection tax; value added tax) for goods that countries are interested in. Along with that are the tax rates that countries are applying to imported goods to build and orient Vietnam's tax policy to improve the trade balance.

At the same time, the Ministry of Finance also compared the overall tax rates with countries that are Comprehensive Strategic Partners of Vietnam to develop a draft Decree amending and supplementing preferential import tax rates of a number of items in the Preferential Import Tariff according to the List of taxable items issued together with Decree No. 26/2023/ND-CP dated May 31, 2023 of the Government on Export Tariff, Preferential Import Tariff, List of goods and absolute tax rates, mixed tax, import tax outside the tariff quota.

“The purpose of the decree is to: Contribute to improving the trade balance with trading partners; encourage businesses to diversify imported goods, create purchasing power for consumers; ensure simplicity, ease of understanding, ease of implementation, and create convenience for taxpayers” - Mr. Nguyen Quoc Hung emphasized.

Clarifying the principles of decree making

According to Mr. Nguyen Quoc Hung, the principle of drafting the decree is to ensure the implementation of the principles of issuing tax rates stipulated in the Law on Export Tax and Import Tax; adjusting import tax on domestically produced goods that have not been produced or have been produced but have not yet met demand. Along with that, focusing on adjusting import tax on goods with high import turnover of countries of interest; the basic adjusted tax rate is not lower than the tax rates of the Free Trade Agreements of which Vietnam is a member. At the same time, ensuring that no new tax rates arise in the tax table; ensuring uniform tax rates for goods of the same nature and type to limit trade fraud, causing difficulties in classifying and calculating tax on goods.

Regarding specific information about the expected adjustment of tax rates of commodity groups and the effectiveness of the decree, Mr. Nguyen Quoc Hung said: The draft Decree has proposed to reduce MFN import tax on commodity groups: Automobiles under 3 HS codes 8703.23.63, 8703.23.57, 8703.24.51 from 64% and 45% to the same tax rate of 32%; ethanol from 10% to 5%; frozen chicken thighs from 20% to 15%; pistachios from 15% to 5%; almonds from 10% to 5%; fresh apples from 8% to 5%; sweet cherries from 10% to 5%; raisins from 12% to 5%; Wood and wood products in heading 44.21, heading 94.01 and 94.03 from tax rates of 20%, 25% to the same tax rate of 5%. Liquefied natural gas (LNG) from 5% to 2%. Ethane: Add Ethane to Chapter 98 with a tax rate of 0%.

"The Decree will take effect from the date of signing and promulgation," Mr. Hung affirmed.

In addition to the United States, Vietnam has established comprehensive strategic partnerships with 11 other countries: China, the Russian Federation, India, South Korea, Japan, Australia, France, Malaysia, New Zealand, Indonesia, and Singapore. Of these, 11/12 countries are included in bilateral and multilateral trade agreements; Vietnam is a member and enjoys tariff preferences in these agreements.

Although Vietnam and the United States have established a bilateral trade agreement since 2001, the two countries do not have a free trade agreement on tariff reduction, so the United States is still a partner subject to the preferential import tax rate (MFN) commonly applied to WTO member countries.

Comprehensive strategic partnership is the highest level in the system of diplomatic relations between countries or between countries and international organizations. This is a strategic and long-term relationship, defined by the connection of long-term interests, mutual support and promotion of cooperation in many fields.

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