Vietnamese goods rank second in tax payment to the US

Vietnam's export turnover to the US market is the 12th highest, but the total amount of tax paid to the US budget is the 2nd highest, only after China.

This information was shared by Mr. Nate Herman, Senior Vice President of Supply Chain, American Apparel and Footwear Association (AAFA), at the international conference on Product Safety and Compliance Issues held on October 19 in Ho Chi Minh City.

According to Mr. Nate Herman, in the first 8 months of 2017, Vietnam's export goods to the US market reached more than 30.16 billion USD, accounting for 1.99% of the total import turnover of goods of this country and ranking 12th in the total import turnover of the US.

Seafood is one of the main products Vietnam exports to the US.

However, during the same period, Vietnamese goods had to pay over 2.2 billion USD in taxes, ranking 2nd in the top 15 countries paying the highest import taxes to the US, just behind China (about 8.85 billion USD in taxes with an export turnover of over 318 billion USD). According to him, the amount of tax on imported goods originating from Vietnam that had to be paid accounted for 10.11% of the total tax revenue of US imports in the first 8 months of this year.

According to Mr. Nate Herman, products and goods from Vietnam are losing their competitive advantage over many other countries and territories because of the high taxes, higher than those of developed countries as well as those in the region. There are some Vietnamese products that are taxed at over 30% and the average for the textile industry is 17%.

Specifically, the markets of developed countries such as Canada, Japan, Germany, Korea, UK, France,... all have higher export turnover to the US than Vietnam in the same period, but pay lower taxes. For example, Japan, in the same period, exported more than 89.2 billion USD, ranked 4th in turnover, but only paid more than 1.56 billion USD. Or the German market exported nearly 75 billion USD to the US in the first 8 months of the year, but paid only over 1.12 billion USD in taxes,...

Even the Canadian and Korean markets have export turnover to the US market reaching over 197 billion USD and 47.2 billion USD, the 3rd and 6th highest, but the tax paid is not in the top 15.

ASEAN countries such as Indonesia only contributed about 823 million USD, Thailand 298 million USD, Cambodia 278 million USD...

However, in the US market, garment products are still the leading group of products in Vietnam's export turnover. And according to Mr. Nate Herman, although Vietnam is at a disadvantage in the US withdrawal from the TPP Agreement, the garment sector still has a competitive advantage.

According to his assessment, the growth rate of exports from Vietnam to the US continues to surpass that of its competitors, even without benefiting from any trade incentive programs or free trade agreements.

According to Mr. Jon Fee, senior consultant, Alston & Bird LLP, in the 12 months to August 31, 2017, apparel imports into the US from Vietnam still increased by 8.74% and footwear increased by 11.83%. "For the US market, Vietnam is the second largest exporter after China in both apparel and footwear groups," Mr. Nate Herman shared, adding that US retailers and consumers recognize Vietnam's strengths in quality, price and delivery commitment.

Mr. Jon Fee also shared other opportunities for Vietnam when the TPP does not take place. He pointed out programs that need attention such as the Regional Comprehensive Economic Partnership Agreement (RCEP), the Vietnam-European Union Free Trade Agreement (EVFTA), the "Belt and Road" initiative BRI, and the Vietnam-China cooperation strategy (Two corridors and one economic belt).

However, at the workshop, US experts said that Vietnam's export activities in the coming time will face many difficulties because the US is tightening regulations and standards on safety of imported products to reduce the trade deficit.

The above workshop was organized by the American Chamber of Commerce in Vietnam (AmCham Vietnam), Ho Chi Minh City branch, in collaboration with the American Apparel and Footwear Association (AAFA).

According to Economic Times