VietNamNet Bridge – The decision to exempt import taxes on medical equipment components, a move to encourage local production, will take effect on November 15.

Under the Prime Minister’s Decision No 54, the imports, which are parts and accessories used in domestic production and assembling of medical equipment, will be exempted from import tax for five years from the day the medical equipment production projects start in Vietnam.

However, the import tax exemption will only be applied to imported components that cannot be manufactured in Vietnam.

Nguyen Minh Tuan from the Ministry of Health said the decision would increase the production and assembling of medical equipment by reducing input production costs for the existing 100 medical equipment manufacturers, including Vietnamese companies.

However, analysts noted that the decision would benefit only foreign-invested enterprises which have factories in Vietnam, while Vietnamese would still face difficulties.

Truong Hung, deputy chair of the Vietnam Medical Equipment Association, said there few enterprises would be subject to the tax exemption.

Hung said Vietnamese enterprises can only make about 600 items out of the 20,000 items now available in the domestic market. And most of the 600 items are simple products, such as hand-held devices, beds, injection needles and plastic gloves.

In recent years, Vietnamese scientific research centers have announced they had successfully invented more complicated equipment, including X-ray machine and laser therapy equipment.

However, the quality and effective of the inventions have not been verified. Therefore, healthcare centers in Vietnam have to spend a great deal of money every year to import medical equipment.

Meanwhile, medical equipment import companies said they would not receive benefits from the Prime Minister’s decision.

A senior business executive commented that if the government wants to open the medical equipment market, it should open it widely instead of doing it half-way.

The executive pointed out that it was unreasonable to exempt tax on parts and accessories to be imported to make brand-new products, but not on parts and accessories to repair existing machines in Vietnam.

Meanwhile, the highest demand for parts and accessories comes not from production projects but from thousands of healthcare centers, which have malfunctioning machines that need spare parts.

Hung said that it would be better to exempt tax for parts and accessories used to replace broken parts of operational machines.

Nguyen Viet Hung, marketing director of Vikomed, a company located in Hoa Lac High Tech Park in Hanoi, noted that though the Prime Minister’s decision will take effect soon, the Ministry of Health still has not released any document to guide the implementation of the decision. Thus, he has no idea what kind of benefits his company may see.

Meanwhile, a representative from the Ministry of Health said the ministry along with the Ministry of Finance is compiling a list of companies and organizations to be subject to tax exemption.

TBKTSG