Vietnamese aluminium businesses are seeking a reduction in export duties to zero, arguing that the current tax rules put domestic suppliers at a disadvantage compared with imported materials.
The Vietnam Chamber of Commerce and Industry (VCCI) has raised concerns over a proposal to cut export duties on unwrought aluminium, bars, rods, profiles and wire to 1 per cent from 5 per cent. The proposed duty on aluminium plates, sheets and strip in coils would be reduced to zero.
Citing feedback from the Vietnam Aluminium Profile Association and businesses, VCCI said the proposed 1 per cent rate would bring little revenue to the state budget while leaving companies with administrative requirements, including tax declarations, payments, guarantees and post-clearance inspections.
The tax issue also affects aluminium sold to export-processing enterprises and businesses operating in non-tariff zones. Under current rules, Vietnamese companies supplying these customers are treated as exporters and must pay a 1 per cent export duty.
However, export-processing enterprises importing aluminium ingots and bars from China, South Korea and Malaysia may qualify for zero import duty.
VCCI said this difference could encourage manufacturers to choose imported aluminium over domestic suppliers. “This creates an unfavourable disparity for domestic manufacturers, effectively encouraging export-processing enterprises to switch to imported aluminium rather than use domestic suppliers.”
It also warned, “This weakens incentives to develop supporting-industry linkages and runs counter to the policy of achieving self-reliance in the materials industry set out in Conclusion 83-KL/TW.”
Reducing the export duty to zero would help domestic aluminium suppliers compete with imports, VCCI said. It added that higher factory utilisation could support more sustainable government revenue through corporate and personal income taxes.
The chamber called for tax policies to be assessed based on their effects on production, employment and domestic supply chains, rather than revenue alone.