Vietnamese businesses have to import glasshouses, for example, but as the Ministry of Planning and Investment (MPI) has not given guidance, many enterprises in Lam Dong province are facing difficulties importing the product. 

Businesses sued the Dak Lak Customs Agency (which is in charge of Dak Lak, Dak Nong and Lam Dong provinces), because they cannot enjoy tax incentives when importing the product, which cannot be made in Vietnam.

This information was released by Le Van Nhuan, head of the Dak Lak Customs Agency, at a workshop on business competitiveness and export promotion of farm, forestry and fishery products held by Hai Quan Newspaper several days ago.

Nhuan said this is not a new problem as enterprises have been complaining for years. The problem has repeatedly been raised at dialogues between businesses and state agencies.

“All businesses have to go directly to the ministries to get certification. Lam Dong’s delegation of National Assembly deputies has reported the problem to the National Assembly. Why haven't ministries solved the problem?” Nhuan said.

Higher tariffs on Vietnamese-content products

Businesses have also complained about the classification of products under HS (harmonized system).

Huynh Quang Thanh, deputy chair of the Vietnam Timber & Forest Products Association (Vifores), said that normal wood pellets (HS Code 4401.31.00) used for brewing and making wine has a zero percent tariff. But if the pellet is further processed with heat which helps it become more durable and turns it into black pellets (HS Code: 4402.90.90.90), it has an export tariff of 10 percent.

In this case, products with lower local content can enjoy tax incentives, while products with higher content cannot. 

Vietnam has encouraged businesses to create higher added value for products.

Currently, cylindrical laminated wood is being taxed at 25 percent. The product is made of many finger joints. Finger joints are not taxed, but cylindrical laminated wood, which needs more production stages, has a high tax.

Thanh warned that if the problem cannot be solved, Vietnam will lose export markets. And if businesses have to pay tax arrears, they will go bankrupt, because 25 percent of revenue is high. Customs agencies need to reconsider this to help businesses improve competitiveness. 

Tran Chung