Preparing to issue a Decree amending MFN tax in March
To respond to unpredictable fluctuations in the world's socio-political situation, in Directive 06/CT-TTg dated March 10, 2025, the Prime Minister requested the Ministry of Finance to urgently submit to the Government to amend Decree 26/2023/ND-CP in a shortened procedures, to be completed in March 2025.
Regarding the content of the draft, Mr. Nguyen Quoc Hung - Director of the Department of Tax, Fee and Charge Policy Management and Supervision (Ministry of Finance), the unit in charge of drafting the Decree - discussed notable adjustments.
Towards fair treatment of Comprehensive Strategic Partners
According to Mr. Nguyen Quoc Hung, this adjustment of preferential import tax rates (MFN) contributes to creating more favorable conditions for trade between Vietnam and countries with comprehensive strategic partnerships.
Vietnam has currently established comprehensive strategic partnerships with 12 countries, including the US. However, because Vietnam and the US do not have a Free Trade Agreement (FTA), they still apply the MFN tax rate according to the WTO regulations.
To ensure fair treatment between comprehensive strategic partners, as well as implement the Prime Minister's direction in Directive 06, it is necessary to adjust the MFN tax rate for some items Mr. Hung emphasized.
Comprehensive review to propose focused tax reduction
According to Mr. Hung, the Ministry of Finance has reviewed current tax rates including MFN, FTA, special consumption tax, environmental protection tax and value added tax, thereby comparing them with the taxes applied by countries to Vietnamese goods.
The draft Decree aims to improve the trade balance, encourage diversification of imported goods sources, facilitate consumers and businesses, while ensuring the principles of simplicity, ease of understanding and implementation.
The principles for tax policy development are also strictly set by the Ministry of Finance: not lower than the FTA level, not creating new tax rates, not causing disruption in classification and ensuring harmony with domestic production capacity.
Expected to sharply reduce taxes on many consumer and energy groups
The draft proposes to reduce MFN tax for many groups of goods, notably:
Cars with code HS 8703 from 64% and 45% to 32%
Ethanol from 10% to 5%
frozen chicken thighs from 20% to 15%
Pistachios, almonds, cherries, fresh apples, dried grapes return to 5%
Wood products from 20% - 25% to 5%
LNG from 5% to 2%
Ethane is added to Chapter 98 with a tax rate of 0%
"The Decree will take effect from the date of signing and promulgation" - Mr. Nguyen Quoc Hung said.
