Chinese steel evades tax, flooding into Vietnam

Over the past 9 months, nearly 1 million tons of Chinese steel billets disguised as alloys have been imported into Vietnam, not only causing our country's steel production enterprises to suffer but also causing the State to lose millions of USD in tax revenue each month.

That is the urgent reflection of a series of steel enterprises, just sent by the Vietnam Steel Association (VSA) to the Ministry of Industry and Trade, Ministry of Finance, Ministry of Science and Technology...

In the document, VSA said that Chinese steel billets imported into Vietnam for the purpose of making construction steel should be subject to a 9% tax, but Chinese businesses added a certain amount of chromium to the steel to turn regular steel billets into alloy billets (enjoying a 0% tax), then massively imported them into Vietnam.

According to the General Department of Customs data cited by VSA, in September 2015, Chinese alloy steel billets imported to Vietnam reached over 62,000 tons, worth more than 20 million USD, a sharp increase compared to the previous month's figure of 3,000 tons and worth nearly 1 million USD.

With just the amount of steel billets "disguised" as alloy steel imported into Vietnam in August and September 2015, the State lost over 1.89 million USD in tax revenue.

VSA recommends that state management agencies strictly control imported steel billets containing chromium.

Mr. Nguyen Van Sua, Vice President of VSA, said that Joint Circular 44/2013 has very strict regulations on steel imports such as: must check whether it meets Vietnamese standards or not, traders who want to import must have a consignment contract... Therefore, the authorities need to strictly control according to regulations.

Many steel billet manufacturing enterprises are struggling because of imported Chinese steel billets.

From that reality, VSA recommends that relevant ministries and branches need to establish inspection teams to monitor enterprises importing chromium-containing steel billets. If they declare to import alloy steel billets but only use them to roll ordinary construction steel, they will be subject to additional taxes and heavy penalties.

“It is necessary to improve regulations and build technical barriers to prevent trade fraud and unfair competition in the import of Chinese steel billets,” VSA stated. In addition, VSA also requested ministries and branches to support businesses and associations in researching and implementing measures such as trade defense and anti-dumping lawsuits against Chinese steel billets.

Mr. Nguyen Van Sua said that in essence, steel billets containing a very small amount of chromium (about 0.3%) are no different from regular billets and are actually being imported and transferred to common construction steel rolling mills.

According to Mr. Sua, Vietnamese enterprises are ready to compete with Chinese steel but must be healthy, the way Chinese steel "disguised" as alloy is imported into Vietnam has created unfair and unhealthy competition. "China is refunding taxes on alloy steel from 9-13%, but enjoys 0% tax when entering Vietnam, domestic steel enterprises will find it difficult to compete" - Mr. Sua warned.

According to Tuoi Tre