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65.8% of tariff lines have 0% tax rate right after the agreement comes into effect. Photo: Internet

Remove nearly 100% of imported tariff lines

According to Mr. Vu Nhu Thang - Director of the Department of International Cooperation, Ministry of Finance, the draft decree has been received and finalized to submit to the Government after obtaining public comments. Through comments, there were 45 unanimous opinions, 13 comments received by the Ministry of Finance and 10 explanations.

Regarding the commitment of export tax in CPTPP, Vietnam commits to abolish export tax for most products currently applied, according to the roadmap from 5-15 years after the Agreement comes into effect. Some groups of important commodities such as coal, oil and some kinds of ore and minerals (about 70 items) will continue to maintain export tax.

Regarding the commitment onimport tariffs, Vietnam committed to abolishing nearly 100% of tariff lines. Accordingly: 65.8% of tariff lines have 0% tax rate right after the Agreement takes effect; 86.5% of tariff lines have a 0% tax rate in the 4th year since the entry into force of the Agreement; 97.8% of tariff lines have a 0% tax rate for the 11th year since the Agreement comes into effect. The remaining items pledge to abolish import tax for the maximum tax elimination schedule in the 16th year or under the tariff quota.

In order to implement Vietnam's export and import tax commitments under the CPTPP Agreement, the Ministry of Finance develops and submits to the Government for promulgating a Decree on export tariffs on special preferential tariffs of Vietnam under each stage, at first it is for the period from 14 January 2019 to December 31, 2022.

Adding items is a violation of commitment

In the explanation and acceptance, the Ministry of Finance received ideas relating to the finalization of the document format; supplement and adjust legal documents to reference and review import tax rates in accordance with Vietnam's committed roadmap in the Agreement.

With the proposal relating to the addition of some mineral products to the Export Tariff with preferential tax rate of 2% and adjustment of export tax on some jewelry and fine art items to 0%, the Ministry of Finance said that, as stipulated in the CPTPP Agreement, Vietnam cannot apply export tax on goods not included in the export tariff.

Mineral products (aluminum oxide and aluminum hydroxide of heading 2818) are not included in Vietnam's commitments on export tax; the inclusion of additional items in the Preferential Export Tariff for implementation of the CPTPP Agreement is a violation of commitments. For gold goods, the items in the Preferential Export Tariff for implementation of the CPTPP Agreement are implemented in accordance with the commitments in the Agreement, in which gold jewelry and fine arts belong to group 71113.19 with tax rates committed at 2%. However, enterprises exporting these products are still entitled to 0% tax rate according to Decree No. 125/2017 / ND-CP and no additional documents are required in accordance with the Decree promulgating the Real Tariff CPTPP.

With the general provisions on Tariffs, there are suggestions that should be applied to the General Tariff for all CPTPP member countries. For the 6 countries that have entered into force, the Decree will stipulate to ensure validity with that group of countries from 14 January 2019. For the remaining 4 countries, the Decree takes effect at the time of entry into force of this Agreement for that country, and at the same time proposes to assign the Ministry of Finance to announce the application of this Decree to goods imported from those countries. Regarding this proposal, the Ministry of Finance said that the above provision is inappropriate because when the Agreement comes into force for a member country, as stipulated in the 2D appendix of the CPTPP Agreement, Vietnam and the country will have to talk about the tariff reduction schedule that the two countries will apply to each other.

Regarding the proposal, the Ministry of Finance is informed that the application of this Decree to newly approved member countries will not meet the implementation requirements of the Decree, since the Decree must amend the contents to suit the final Results agreed between the two sides on the roadmap for tariff reduction. According to the Ministry of Finance, the current draft decree has clear provisions for customs authorities and enterprises to look up tax rates and schedule for each group of countries. In case the Decree does not provide specific regulations and then assign the Ministry of Finance to announce the application of the Decree, it will make it difficult and confusing for Customs and enterprises in the implementation process.