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Vietnam may nix stainless scrap export tax

Keywords: Tags  Vietnam tax, stainless scrap, export tax, Vietnam Steel Association, Dinh Huy Tam, Ministry of Industry and Trade, Ministry of Finance, Weilyn Loo

SINGAPORE — The Vietnamese government is considering the removal of a 15-percent tax on stainless steel scrap exports, Dinh Huy Tam, vice chairman and general secretary of the Vietnam Steel Association (VSA), confirmed to AMM sister publication Steel First Sept. 25.

The elimination of the tax would be useful in easing "the heavy burden" on domestic stainless steel producers as the operating environment in the sector remains difficult, he said.

The proposal by the country’s Ministry of Industry and Trade has full support from the VSA, he added.

The Ministry of Finance also recently proposed that the government consider offering a zero tax rate for Posco VST Co., one of the country’s largest stainless steel manufacturers, according to a report in the Vietnam News.

This was in response to the company’s petition to keep the cost of exporting metals waste a viable option.

It is unknown when the proposal might be passed into law, but Tam said the idea has been at the discussion stage for two years and he hopes the government will implement the proposed tax removal soon.

"There is currently no melting capacity (for stainless steel) in Vietnam," he said, adding that there might not be any until 10 years from now.

Stainless steel scrap is currently exported to other countries for refining, according to the Vietnam News report citing information from the industry ministry. This reprocessed steel is then imported back into Vietnam for use in domestic manufacturing.

One steel producer said the 15-percent export tax rate on stainless steel scrap was a considerable issue for domestic manufactures, pushing up production costs to reduce the competitiveness of locally produced steel products against those imported from countries like China, the report noted.

According to the industry ministry, the export of stainless steel scrap didn’t affect the country’s natural resources and minerals because the scrap originated from imported raw stainless steel products.

A version of this article was first published in AMM sister publication Steel First.

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