Electronics import tariff cuts don’t have much significance

In principle, the import tariff reductions for consumer electrics, electronics and information technology products would make products cheaper and more salable. However, distributors say the import tariff cuts will not have big effects.

Since January 1, 2012, the tariff of these kinds of products have reduced by 4-10 percent under the plan to cut tariffs gradually within the framework of the ASEAN’s free trade agreement AFTA, the ASEAN-China free trade agreement and the ASEAN-Republic of Korea free trade agreement.

The product items and the tariff cuts have been clearly stipulated in the Circulars No 161, 162 and 163 issued by the Ministry of Finance on November 17, 2011.

Portable electric fans, box fans, wall fans, ceiling fans; air conditioners, refrigerators, washing machines have seen the tariff down from 20 percent to 15 percent, while vacuum cleaners, floor polishers from 20 percent to 10 percent, microwave, quick water heaters from 15 percent to 10 percent, and webcams, cameras from 10 percent to five percent, kitchenware, household goods from 25 percent to 15 percent.

Meanwhile, within the AFTA, in 2012, information technology products will have the import tariff at zero percent.

Consumers keep indifferent to the information about tax cuts.

Computers mostly come from China, taxed zero percent

In fact, computer distributors say consumers would get no benefits from the new tariff cuts.

Meanwhile, most of the computer imports are from China. Meanwhile, under the roadmap of tariff cuts within the framework of the ASEAN-China trade agreement, a lot of imports from China have enjoyed the zero tax tariffs already. The importers just need to prove that the import consignments, for example, computer products, are sourced from China (form E- certificate of origin C/O), to enjoy the zero tax rate.

“The tariff on mobile phones from China was cut to zero percent one year ago,” Vu Hoang Huu, Director of VHH Company, affirmed.

“Except very few consignments of computers imported from non-regional countries, such as from the US or Europe, which are imposed the tax of 3 percent, other imports come from China, therefore, we do not bear import tax,” said Doan Hong Viet, Director of DigiWorld, specializing in importing computers.

TVs, refrigerators, air conditioners mostly from ASEAN, taxed 5 percent

Meanwhile, electronics, household electrics and refrigeration products sourced from ASEAN have been enjoying the tax rate of five percent for the last four years. Big electronics manufacturers such as Panasonic, Sharp, Sanyo, Sony and Hitachi all have their factories set up in ASEAN countries; therefore, their exports to Vietnam can enjoy preferential tariffs.

Since most of these kinds of products available in Vietnam are the imports from ASEAN, Vietnamese consumers have been purchasing cheap products already

Meanwhile, the number of refrigerators, air conditioners and washing machines imported from China is not big; therefore, distributors do not care much about the tariff cut of five percent on the imports from the country. Especially, Chinese Haier and TCL have had factories in Thailand and Vietnam for a long time already.

Do Khoa Tan, Director of Bien Hoa Electronics Company (Belco), said that the latest tariff cuts would only have impacts on some specific products such as large size TVs, or specialized montage equipments.

It is expected that the electronics imports from South Korea would also not be big, because many well known manufacturers have had set up factories in Vietnam. Meanwhile, the tariff cuts within the framework of the ASEAN-Republic of Korea free trade agreement mainly applied to food products and cosmetics.

Source: SGTT

Tags: Vietnam Electronics import tariff