According to information from The financial, Since the end of 2019, pork prices have remained high, mainly due to lower supply than demand (caused by African pig cholera).
In order to contribute to stabilizing pork prices, ensuring people's lives, especially in the context of being affected by the Covid-19 epidemic, the Ministry of Finance submits to the Government the reduction of import tax on frozen pork.
Specifically, on May 17, 2020, the Ministry of Finance sent official dispatch No. 5521 / BTC-CST to the Ministry of Agriculture and Rural Development, the Ministry of Industry and Trade and the Ministry of Justice to send comments directly to the Ministry of Agriculture and Rural Development. The Government Office allows the Government Office to summarize and report to the Prime Minister on the addition of the content of adjustment of import tax of frozen pork to the draft Decree amending a number of articles of Decree No. 122/2016 / ND-CP and Decree No. 125/2017 / ND-CP.
The proposed commodity to reduce import tax is frozen pork under subheading 0203.2x (including HS codes 0203.21.00; 0203.22.00; 0203.29.00) from 15% to 10% and apply until the end of 2020, from January 1, 2021, continue to return to tax rates rate of 15%.
The MFN tax rate of 10% is equivalent to the CPTPP tax rate in 2020 (excluding Mexico) of 9.3%, which will contribute to reducing the gap with FTA tax rates prescribed in signed Agreements (CPTPP, VN- EAEU FTA), thereby creating a competitive advantage for meat imported from markets such as the US and Brazil.
The deadline for the proposed reduction only lasts until the end of 2020 because according to a report of the Ministry of Agriculture and Rural Development, the country has re-pig herds in the country, the average growth rate of pigs in the first 3 months of 2020 is 6. 2%, expected by the end of the second quarter, the beginning of the third quarter of 2020 is likely to balance the supply and demand of pork. Therefore, the tax rate needs to be adjusted from January 1, 2021 to the current level (15%), which is reasonable to support domestic livestock production to develop stably.
Assessing the impact of reducing the frozen meat tax from 15% to 10%, the Ministry of Finance said that reducing the MFN import tax will cause the import price to decrease, thereby increasing the volume of pork. Imports from the US as well as from other markets with MFN tax rates imported into Vietnam may affect the domestic livestock industry. The tax reduction will only apply until the end of 2020 and is adjusted from January 1, 2021, when the supply and demand situation has stabilized so it is expected not to affect much to the domestic livestock industry. Other way, The reduction of tariffs leads to lower prices of imported products, and consumers benefit from having more choices.
In case of adjustment of import tax from 15% to 10%, if taking the import taxable turnover in 2019, the State budget revenue is expected to decrease by VND 29 billion in the last 6 months of 2020.
