Preferential import tax adjustment for some goods

In Directive 06/CT-TTg 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 on export tax schedules, preferential import tax schedules (MFN), list of goods and absolute tax rates, mixed taxes, import taxes outside tariff quotas to adjust tax rates for a number of groups of goods to ensure harmony and rationality according to simplified procedures, to be completed in March 2025.

Mr. Nguyen Quoc Hung, Director of the Department of Tax, Fee and Charge Policy Management and Supervision (Ministry of Finance), the unit in charge of advising on the amendment of the regulation, discussed with the press some related contents.

- Sir, why is it necessary to amend Decree 26/2023/ND-CP?

- On September 11, 2023, Vietnam and the United States established a comprehensive strategic partnership for peace, cooperation and sustainable development. This is an important milestone in Vietnam's political and economic diplomacy, contributing to enhancing Vietnam's geopolitical position in the world. In the Joint Statement on economic, trade and investment, the two countries agreed to create more favorable conditions and open markets for goods and services from each country.

In addition, Vietnam has established comprehensive strategic partnerships with 11 other countries: China, Russia, India, South Korea, Japan, Australia, France, Malaysia, New Zealand, Indonesia, and Singapore. Eleven of these 12 countries participate in bilateral and multilateral trade agreements of which Vietnam is a member and enjoy tariff preferences under these agreements.

Although Vietnam and the United States have established a Bilateral Trade Agreement since 2001, Vietnam and the United States do not have a free trade agreement on tariff reduction, so the United States is still a partner subject to the MFN tax rate 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.

Implementing Directive No. 06/CT-TTg of the Prime Minister on key tasks and solutions to proactively, flexibly, promptly, appropriately and effectively adapt to the world and regional situation in order to achieve growth targets, maintain macroeconomic stability, control inflation, and ensure major balances of the economy in 2025 and the following years, 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.

- How to adjust this Decree, sir?

- The Ministry of Finance has reviewed all tax rates (MFN preferential import tax, which is the tax rate applied to countries in the WTO, special preferential import tax, which is the tax rate applied to countries with free trade agreements (FTA) with Vietnam), special consumption tax, environmental protection tax, value added tax on goods that countries are interested in, as well as the tax rates that these 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 tax schedules, preferential import tax schedules, list of goods and absolute tax rates, mixed taxes, and import taxes outside tariff quotas.

The development of the Decree aims 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.

The principles for developing the Decree are also specified as ensuring the implementation of the principles for promulgating 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; focusing on adjusting import tax on goods with high import turnover and countries of interest; the basic adjusted tax rate is not lower than the tax rates of free trade agreements to 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 classifying and calculating tax on goods.

- Could you tell us what groups of goods are expected to have adjusted tax rates?

- The draft Decree has proposed to reduce MFN import tax on the following groups of goods: Automobiles under the three 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% down to 2%...

Thank you very much!

(According to HNMO)

Source: https://baoyenbai.com.vn/12/347769/Adjustment-of-import-tax-preferential-regulations-with-voi-mot-so-mat-hang.aspx