Iron and steel used for tyre bead wire produciton will enjoy a zero per cent import duty from May 2. — Illustrative photo banxehoi.com

HA NOI (Biz Hub) — Iron and steel used for tyre bead wire production will enjoy a preferential import tax rate of zero per cent from May 2, the Ministry of Finance announced in a recent circular.

Tyre bead wire is used to reinforce virtually all types of pneumatic tyres for motorcycles, passenger cars and trucks, as well as off-road and farming vehicles.

Circular No 51/2016/TT-BTC specifies that the zero-per-cent rate will be applied for non-alloy iron and steel in stick, bar or roll shapes, laminated with a diameter of less than 14mm. The rate will also be applied for iron and steel wires.

The ministry gave out the preferential import duty after suggestions by steel-maker Posco Viet Nam Processing Centre Co Ltd, which is based in Nhon Trach 5 Industrial Zone in Dong Nai Province.

Hai quan, an online Viet Nam Customs newspaper, reported that Posco and tyre makers in Viet Nam currently have to import non-alloy hot-laminated steel sticks with a tax rate of 3 per cent. This is because the country isn't yet able to make this product domestically.

Around 30 tyre manufacturers in Viet Nam, including Sao Vang Rubber JSC, Da Nang Rubber JSC and Kumho, are seeing stiff competition from about 460 firms that import tyres from Thailand, Japan, China and Taiwan for domestic sale.

Posco proposed the import tax rate be lowered to zero per cent for the steel sticks until this material can be made in Viet Nam. This will encourage development of domestic supporting industries, the firm said. — VNS