Vietnam’s finance ministry considers taxing imported chrome alloy steel. Photo: Hung Nguyen
The Ministry of Finance is considering changing a tax regulation following concerns that the rule has been abused by Chinese exporters to ship a large amount of steel to Vietnam without paying duties.
Currently imported steel with at least 0.3 percent of chrome content will be exempt from tarriffs, but the ministry wants to introduce a 10 percent tax.
The proposal is now awaiting feedback from the Ministry of Industry and Trade, the Ministry of Planning and Investment, and other relevant agencies.
It came after the Vietnam Steel Association voiced concerns over strong increases in Chinese-imported alloy steel billets recently.
Chinese exporters claim their products contain 0.3-0.4 percent chrome content, thus getting import duty exemption under Vietnam’s existing laws, the association said.
But the very small chrome content does not add any value to the steel billets, meaning they cannot be used for making high-quality products, it said, recommending them being taxed at 9 percent, which is the rate for non-alloy steel used for construction purposes.
Since local products cannot compete with cheap imports, many Vietnamese manufacturers have had to scale down their production, according to the association.
Vietnam imported 62,000 metric tons of steel last month, only slightly lower than the combined figure for July and August, it said.
It estimated that the government lost $1.89 million in taxes in the past two months due to the dubious nature of the Chinese steel.
More than 1.13 million tons of steel billets, mostly from China, were imported in the first nine months, almost triple the volume imported in the same period last year.