Finance Ministry believes tariff cuts in agreements won't have impact on bottom line.
At a press conference on economic integration on June 3 the Ministry of Finance (MoF) said that the free trade agreements (FTAs) Vietnam has signed will not overly affect the State budget, despite tariffs being cut by 90 per cent on most items.
According to Mr. Ha Duy Tung, Deputy Director of the International Cooperation Department at MoF, in terms of opportunities and challenges the tariff reductions are not obstacles to pulling in budget revenues. Although the proportion of revenue from exports and imports has declined in recent years the figure has still increased.
Vietnam has now signed ten FTAs, most recently the Vietnam - South Korea FTA and the Vietnam - Eurasia Economic Union FTA.
Others, meanwhile, have suggested that apart from affecting budget revenues the tariff reduction may also hinder domestic enterprises in their efforts to compete against foreign-invested enterprises.
The ministry, however, said that tariff reduction commitments are made on goods, not enterprises, so enterprises have both challenges to face and opportunities to seize. “It is important that enterprises use all the available advantages,” Mr. Tung stressed.
On that basis MoF proposed improving information provision on Vietnam’s commitments and those of its partners in FTAs to enable enterprises to identify what the opportunities may be.