VINACHEM

HA NOI — Nearly 1,000 goods items would enjoy an import tax cut of 1-6 per cent in 2011, according to the Ministry of Finance's Taxation Policy Department.

Director of the department Vu Van Truong said the items would mainly include agricultural produce, seafood, construction materials and electrical appliances.

The average drop for most items would be 2-3 per cent, said Truong.

The cut, part of Viet Nam's commitment to the World Trade Organisation, was expected to benefit domestic consumers, giving them a wider choice of reasonably priced imported goods, Truong said.

However, he warned that the cut would also place pressure on Vietnamese goods that would face fierce competition from imported products.

Trade experts were also concerned about a predicted surge in the country's trade deficit next year in the wake of the import tax cut.

The country imported US$84 billion worth of goods last year, up 20 per cent over the previous year with a trade deficit of $12.3 billion.

This year, the country plans on restricting the trade deficit to $14.18 billion with an import value of roughly $92 billion.

Last year, roughly 2,000 goods including food, animal feed, construction materials and steel also enjoyed an import tax cut of 1-6 per cent, which cost the State budget roughly VND1 trillion ($51.28 million). — VNS