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    • Import tax exemption to benefit domestic ICT industry

    The information and communication technology sector has grown by 6-9% each year and has often exceeded the country’s GDP growth rate in recent years, attendees were told at workshop held by the Ministry of Information and Communications (MIC).
    Import tax exemption to benefit domestic ICT industry ảnh 1At the workshop on policies for import and export of raw materials, supplies, components and information technology products. (Photo: mic.gov.vn)
    Hanoi (VNS/VNA) - The information and communicationtechnology sector has grown by 6-9% each year and has often exceeded thecountry’s GDP growth rate in recent years, attendees were told at workshop heldby the Ministry of Information and Communications (MIC).

    MIC held the workshop on policies for the import and export of rawmaterials, supplies, components and information technology products; anddisseminated Circular 25/2022/TT-BTTTT in Hanoi on March 29.

    The Authority of Information Technology and Communication Industrysaid Resolution 23-NQ/TW dated March 22, 2018, of the Politburo set out theorientation for the national industrial development towards 2030.

    The resolution identifies the development of the informationtechnology industry, in which the electronics industry is the main path. Italso set a goal to reach an advanced level by 2030, meeting the requirements ofthe fourth industrial revolution in order to create digital technologyplatforms for other industries.

    The revenue of the IT industry reached 148 billion USD last year,with software accounting for about 6 billion USD, and electronic hardware 135billion USD, accounting for 17.8% of the whole industry.

    However, the above results are mainly contributed by FDIenterprises.

    In terms of hardware, up to 99% of the electronic andtelecommunications equipment in use in Vietnam is imported.

    Vietnamese electronics enterprises still have many limitations interms of scale and technology and the domestic market mainly relies on importedor foreign brands.

    To promote the development of the country's IT and electronicsindustry, the Government and the Ministry of Information and Communicationshave implemented the Make-in-Vietnam strategy with a focus on design, creationand manufacturing in Vietnam.

    As of January 2023, Vietnam has signed 17 FTAs and is consideredan open economy.

    With the implementation of many trade agreements, tariff barriersare increasingly reduced and most IT and electronic products have a 0% importtax rate.

    However, there are still many raw materials and components for theproduction of IT and electronic products with tax rates of 5-20%.

    The inadequacy in import tax on CBU products and raw materials andcomponents leads to the lack of competition of domestically-produced productswith imported products in terms of production costs.

    This has a significant impact on the development of Vietnam'sdigital technology industry.

    Do Thuy Huong, Vice President of the Vietnam Association ofSupporting Industries (VASI), member of the executive committee of the VietnamElectronic Industries Association (VEIA), emphasised that the electronicsindustry has made a great contribution to the balance of foreign exchange andtrade balance for the whole country.

    The country had a trade surplus of 11.2 billion USD last year, ofwhich, the electronics industry has a trade surplus of 11.246 billion USD, saidHuong.

    However, in the process of import and export, Vietnameseelectronics enterprises were facing many difficulties and challenges, shenoted.

    Speaking at the opening of the workshop, Deputy Director in chargeof the Authority of Information Technology and Communication Industry NguyenThien Nghia said that in order to solve the policy inadequacies, support topromote research, development and production of electronic hardware products inVietnam, the Ministry of Information and Communications issued Circular25/2022/TT-BTTTT on December 31 last year defining imported raw materials andcomponents that are exempt from import tax to directly serve productionactivities of IT products, digital content, and software.

    This is an important policy to support domestic enterprises in theproduction of IT products, and to solve the inadequacy of the import tax on CBUproducts which is lower than the import tax on raw materials and components.

    This also aims to create policy solutions for the Make-in-Vietnamstrategy, which promotes design in Vietnam, product making in Vietnam, andswitch from assembling and processing to manufacturing Vietnamese products./.
    VNA

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