Hanoi Iron and Steel (HSV) - Steel manufacturing businesses believe that reducing construction steel import taxes and increasing steel billet export taxes could push the steel industry into difficulties and lose export markets, while domestic demand is still guaranteed.
Faced with the Ministry of Finance's proposal to reduce taxes on some construction steel products to 10-15% and increase steel billet export tax from 0% to 5% with the goal of contributing to stabilizing the supply of steel billets for the domestic market, stabilizing market prices and limiting the export of steel billets, keeping domestic production, many businesses believe that this is not appropriate.
In a document sent to the Government and relevant ministries, Hoa Phat Group Joint Stock Company said that recently when world steel prices decreased, domestic prices were adjusted down by about 1.4 million VND/ton for construction steel.
This company affirms that steel prices in Vietnam are one of the lowest in the world, for example, the price of hot rolled coil steel (HRC) in the US is 1,500 USD/ton, in Europe it is 1,200 USD/ton and in Vietnam, this company is selling under 1,000 USD/ton and has no export plan, prioritizing the domestic market.
"The proposal to impose export tax on steel billet and reduce import tax on some steel products will have a double impact, negatively affecting steel production companies" - Hoa Phat assessed.
Hoa Sen Group Joint Stock Company said that the Vietnamese steel market is very competitive, when domestic steel products are dumped in the Vietnamese market. The increase in steel prices is not local, but due to increased imported input materials.
Given that the increase in steel prices is only short-term, this business believes that tax policy should not be used to regulate short-term fluctuations in the market.
In the written petition, the Vietnam Steel Association (VSA) also said that for stable production, businesses must accept high raw material prices and fully supply goods to the market. Therefore, VSA believes that the proposal to adjust import and export taxes on iron and steel is not appropriate with the current situation of the steel production industry.
"Export and import tax policies in general and steel export and import taxes are long-term policies that contribute to promoting the domestic manufacturing industry, including steel, to develop sustainably, rather than being an immediate short-term solution to handle temporary market increases and decreases" - VSA recommends that the Government needs to have consistent policies to protect domestic production.
Previously, construction steel prices continuously increased by 40 - 50% compared to the beginning of the year, causing many businesses and construction contractors to face difficulties and increase costs. The Vietnam Construction Contractors Association recommends that the State needs to clarify fluctuations in steel ore import prices to have appropriate control solutions and clarify whether or not businesses join hands to increase steel prices.
Under the direction of the Government, the Ministry of Industry and Trade has established an interdisciplinary inspection team on the production and business situation and steel price fluctuations at a number of enterprises. Up to now, the inspection has been basically completed and the ministry is sending a report to the Government, while previously affirming that "there is no basis to conclude that steel enterprises are raising prices".