AMENDED PREFERENTIAL TAX RATE BENEFITS VIETNAM’S FOOTWEAR EXPORTS

Amended preferential tax rate benefits Vietnam’s footwear exports

Vietnam is expected to take advantages of amended preferential import tax rates to export goods to EU – the country’s biggest export market, in the next year.

After changing the Generalized System of Preferences (GSP) for most developing countries, the import tax rates on goods imported from Vietnam will be lower or exempt. The current GSP took effect from 2009, but it applied to a limited number of commodities. The number of countries that enjoy the preferential import tax rates will also be reduced to 89 countries from 176 countries at present. That number includes 49 least developed countries and 40 low income countries. With an average income of $ 1,555 last year, Vietnam will be in the list of those countries. The analysts said the change will benefit several export items of Vietnam, especially shoes and bags.

Several EU member countries has imposed anti-dumping duty of 10 per cent on 2 items in a few years ago to protect the local industry, which was in trouble.

Vietnam Investment Review quoted Deputy Minister of Foreign Affairs Bui Thanh Son said that Vietnamese companies will have a great opportunity to promote exports to EU, if they are able to fully implement the new plans.

EU will push the import tax rates down to 0 per cent on 40 per cent of items exported by Vietnam to the block, he said.
In the first 6 months of 2013, Vietnam exported US$ 11.6 billion worth of goods to EU. Mr. Truong Dinh Tuyen, the former trade minister, has warned that the exporters should target several main markets in the EU.

EU member countries set a ceiling for import tax rate of 17.5 per cent for all goods, except for apparel of 14.5 per cent.
But according to Mr. Tran Ngoc Quan, Deputy Director of the Department of European market, said that the new GSP has raised the import tax rate ceiling for a number of items.
For example , the import tax rate ceiling for coffee will be 21.68 per cent and footwear – 34 per cent.

Lefaso.org.vn