Hanoi (VNS/VNA) - Reduced revenue from cutting taxeson imported goods in accordance with various free trade agreements (FTA)Vietnam had signed was unlikely to affect State revenue, said the financeministry in a conference held on December 12 in Hanoi.

Revenue from tariffs and taxes has decreased by 13 trillion VND (475 millionUSD) compared to the same period last year. However, the ministry said earlierforecasts for net revenue to reach 340 trillion USD by the end of the yearremained unchanged.

Le Manh Hung, deputy head of Vietnam Customs’s tax department, said import/exporttaxes were not the only revenue source as goods were also subject to otherregimes including special consumption taxes, value-added taxes, anti-dumpingduties and environmental protections taxes, among others.

“FTAs only require the removal of import taxes. For goods subject to multipletax regimes, only import taxes will be lifted,” said Hung.

There had been a steady decrease in revenue from import taxes in recentyears, according to a report by the customs authority, which resulted insmaller contribution to State revenue. Import tax revenue in 2018 droppedby 29 trillion VND and contributions to the State revenue ratio shrank by 4.4 percentin comparison to the previous year.

Net revenue from customs agencies, however, has been steadily risingwith last year’s total figure reaching 314 trillion VND and thisyear’s forecast at 340 trillion VND. The year’s total figure also depends onimport/export activities.

In addition, increased revenue from the domestic market had helped offsetthe falling income from import taxes, said Ha Duy Tung, deputy head ofinternational trade cooperation at the finance ministry.

“Furthermore, Vietnam has been taking a proactive approach to startnegotiations with major economic partners to take full advantage of its exportmarkets,” said Tung.
Vietnam has become asignatory of or in the process of joining 20 trade agreements withcountries and economies around the world.

So far, 12 FTAs had gone into effect with the Regional ComprehensiveEconomic Partnership (RCEP), one of the world’s largest free trade agreements,likely to reach a conclusion in the near future, said Tran Thi Thu Huyen,a representative from the ministry.

Proposals to slash import taxes and tariffs for imported goods underthese FTAs have been submitted to the Government to implement.

Notably, a road map toremove tariffs for imported goods from ASEAN countries was completed in2018.

With regards to theComprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)signed in 2018, Vietnam is set to remove export tariffs for its goods in thenext 5-15 years, with the exceptions of a number of important imports includingcrude oil, coal and gold.  

The country had also set a target to reduce import tariffs to 0 percenton 86.5 percent of imported goods by 2022 with a plan toincrease this figure to 97.8 percent by 2029, according to the ministry./.