Local Vietnamese sources have reported that Vietnam's Prime Minister Nguyen Tan Dung has ordered the ministry of finance to investigate large tonnages of imported rolled products linked to alleged commercial tax fraud and evasion involving the declaration of carbon steel imports as boron-added steel in order to benefit from zero tariffs. The Vietnamese ministry of industry and trade and also the Vietnam Steel Association (VSA) have been asked to assist in the inspections.
According to VSA members, Vietnamese Thanh Long Steel Company (Thanh Long), located in the northern province of Hung Yen, told customs that its imports of 29,000 mt of boron-added steel from China in January and February were in fact alloy steel.
However, a testing center, the Directorate for Standards, Metrology and Quality, found that the steel products were in fact carbon steel with only a small amount of boron added.
Carbon steel imports are subject to an import duty rate of 12 percent, while boron-added steel imports are subject to zero duty. With the zero import duty rate, Thanh Long was able to sell the imports at VND 800,000/mt to VND 1,000,000/mt ($45/mt-$56/mt) less than domestic products.
To help local steel firms liquidate their growing stockpiles, the ministry of finance decided to increase the import tax on steel billet from five percent to eight percent and the tax on finished steel from 12 percent to 15 percent, starting April 1.