A steel production line at the Hoa Phat Steel Company. — VNA/VNS Photo Huy Hung

HA NOI (Biz Hub)— The Ministry of Industry and Trade (MoIT) has proposed to remove the tax rate of 15 per cent imposed on the export of stainless steel scrap entirely, to ease the financial burden on domestic stainless steel manufacturers.

The Ministry of Finance also recently proposed the Government consider offering a zero tax rate for one of the country's big stainless steel manufacturer, Posco VST Company, in response to the company's plea for a financial incentive to keep the cost of exporting the metal waste a viable option.

The current tax was estimated to cost Posco VST around VND87 billion (US$4.14 million) in export duties a year.

There are currently no stainless steel furnaces in Viet Nam. Stainless steel scrap is exported to other countries to be refined, according to the ministry. This reprocessed steel is imported back into the country for use in domestic manufacturing.

One steel manufacturer said that the tax rate of 15 per cent on the export of the scrap was a considerable issue for domestic manufactures, pushing up production costs enough to lower the competitiveness of domestically produced steel products against those imported from countries like China.

According to the MoIT, the export of stainless steel scrap did not impact the country's natural resources and minerals because the scrap originated from imported raw stainless steel products in the first place.

The ministry said that the export tax should be removed altogether based on Circular 87/2010/ND-CP.

Previously, the Viet Nam Steel Association called on the Government to enhance the inspection of low-price steel products containing boron imported from China to protect domestic production. — VNS