According to the draft, some products including hi-tech equipment and machinery will be exempted from import taxes. This will help reduce costs but also cause difficulties for domestic manufacturers.
Most Vietnamese manufacturing firms use import equipment and machinery, especially those businesses in more hi-tech industries. According to statistics by the Vietnamese customs, industrial equipment and machinery imports in the first 9 months of this year increased by 29% over the same period last year.
With large amounts of imports, firms have to consider their retail prices either in domestic or export markets based on the import taxes they have to pay. According to experts, tax rate calculations are still ambiguous for businesses.
According to the Tax Department tax rates are based on the amount of imported machinery and equipment. Enterprises pay less tax if they import larger amounts of goods. Besides the number of machinery and equipment, tax is calculated based on manufacturing capacity of domestic firms, according to the draft amended import-export tax law.
