Massive quantities purporting to be alloy despite having minuscule quantities of chrome are imported tax-free
Vietnamese steel producers have urged authorities to monitor the increasing imports of steel billets from China, saying the tax exemption provided for such imports needs to be reconsidered.
In letters to the finance ministry and other relevant agencies, the Vietnam Steel Association said Chinese exporters claim their products are alloy steel with 0.3-0.4 percent chrome content, thus getting import duty exemption.
But the minuscule chrome content does not add any value to the steel billets, meaning they cannot be used for making high-quality products, it said.
They should be taxed at 9 percent, which is the rate for non-alloy steel used for construction purposes, it said.
It said the Ministry of Industry and Trade together with customs should closely supervise how the imported billets are used, and slap the tax if they are found to be used for producing construction steel.
The association's letters came after imports of Chinese steel billets shot up, forcing many local manufacturers to scale back production since they cannot compete with the cheap imports.
Vietnam imported 62,000 tons last month, only slightly lower than the combined figures for July and August when over 65,000 tons were bought.
At this rate, with the tax exemption, Chinese imports will soon dominate the market, driving local producers out of business, it warned.
It estimated that the government lost $1.89 million in taxes in the past two months due to the dubious nature of the Chinese steel.
More than 1.13 million tons of steel billets, 75 percent of it from China, were imported in the first nine months, almost triple the volume imported in the same period last year.