The Ministry of Finance is seeking comments on the draft Decree amending Decree 26/2023/ND-CP dated May 31, 2023 to adjust tax rates on a number of commodity groups to ensure harmony and rationality according to simplified procedures, to be completed in March 2025.

According to the Ministry of Finance, the United States is Vietnam's largest export market (accounting for 30% of total merchandise exports) and Vietnam is the 8th largest trading partner of the United States. In 2024, the total two-way trade turnover between Vietnam and the United States will reach more than 132 billion USD.

Of which, Vietnam's exports to the United States reached nearly 119 billion USD, up 23.3% over the same period in 2023; imports from the United States reached 15 billion USD, up 7.3% over the same period in 2023. The US trade deficit reached about 104 billion USD (7 times the value of Vietnam's imports from the United States).

According to the Ministry of Finance, the trade deficit with Vietnam has also been a matter of concern for the United States for many years, especially since 2019 when the United States requested that both sides jointly develop and implement a Vietnam-US Action Plan towards a harmonious and sustainable trade balance.

Regarding tax rates on US goods, the Ministry of Finance said that the US is a partner applying MFN tax rates and is also a partner with a large trade surplus with Vietnam. Through reviewing and comparing the overall tax rates, the Ministry found that most Vietnamese goods are applying higher rates than those applied by the US.

Accordingly, the Ministry of Finance believes that 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.

cherry.png
Sweet cherries are one of the products proposed to have import tax rates reduced. Photo: NVCC

Regarding the amendment of Decree 26, Mr. Nguyen Quoc Hung, Director of the Department of Tax, Fee and Charge Policy Management and Supervision (Ministry of Finance) said that the draft Decree proposed to reduce MFN import tax on many groups of goods such as 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 group 44.21, group 94.01 and 94.03 from tax rates of 20% and 25% down to the same tax rate of 5%.

Liquefied natural gas (LNG) from 5% to 2%. Add Ethane to chapter 98 with 0% tax rate.

The Decree shall come into force from the date of signing and promulgation.

According to Mr. Hung, the development of the Decree aims to contribute to improving the trade balance with trade 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.

According to the representative of the Ministry of Finance, the basic adjusted tax rate is not lower than the tax rates of the Free Trade Agreements of which Vietnam is a member; ensuring that no new tax rates arise in the tax schedule; ensuring uniform tax rates for goods of the same nature and type to limit trade fraud, causing difficulties in the classification and calculation of goods taxes.

Source: https://vietnamnet.vn/no-luc-cai-thien-can-can-thuong-mai-voi-my-bo-tai-chinh-co-de-xuat-moi-2384405.html