Big-wig dairy producers narrowly escape $45.87 million toll

photo source: Tam Thanh / nld.com.vn

In a document recently sent to the prime ,inister, the Ministry of Finance (MoF) stated that it would revoke the subordinate General Department of Customs (GDT)’s decision of collecting the tax sum from eight milk manufacturers. GDT’s move aimed to recover the import tax sum that had not yet been collected.

Including big names, such as Vinamilk, Nutifood, Friesland, and Hanoi Milk, the group submitted a proposal to the prime ,minister in December 2015, requesting the termination of GDT’s decision.

In their proposal, dairy producers argued that a heavy toll around VND1 trillion ($45.87 million), would inevitably find its way to weigh on consumers by means of higher sales prices for many products.

“Dairy products for children aged 1-6 years are currently the main output of the dairy industry. These are products that the government has already expressed concerns over, regarding the continuous rise in prices,” the document stated.

The consequences may be even more serious if the new classification of ‘imported material’ was applicable from now on, the document added.

Importing goods since 2000, these firms claimed that they have always classified their goods as Anhydrous Butterfat (ABF), coded 0405.90.10, and subject to an import tax tariff of 5 per cent. However, in 2014, the customs determined that some containers declared as such contained in fact Anhydrous Milk Fat (AMF), coded 0405.90.90, and subject to a threefold tax level of 15 per cent.

Under the existing Law on Customs, a toll can be imposed in cases where customs authorities investigate violations within a time period of five years after customs were declared. Thus, the GDT decided to review and collect tax arrears since 2010 until present.

Besides withdrawing the tax arrear toll, the MoF also plans to adjust the import tariff level of AMF, recognising that the current 15 per cent is too high and could hinder the local manufacturing of many milk-extracted products. The ministry, therefore, lowered the import tariff to only 5 per cent, equal to that imposed on ABF.