Formosa eyes import tax break

Taiwan’s Hung Nghiep Formosa Ha Tinh Steel Limited Company, a subsidiary of Formosa Plastics Group, has proposed it be exempt from paying import taxes on its project.

Formosa steel is lobbying to have imports for constructing its project exempt from tax

A Ministry of Planning and Investment (MPI) official told VIR that Formosa Ha Tinh’s proposal was submitted to the prime minister. Now the ministry is also waiting for the government’s guidance on the matter, said the official.

Formosa Ha Tinh now faces entanglement in the import tax policy on its machines and equipment to create fixed assets for its giant steel and port complex in the central province of Ha Tinh.

Specifically, in early November 2013, the company sent a document to the General Department of Customs (GDC) proposing an import tax exemption for its complex. In late November 2013, the GDC released its own document to Formosa Ha Tinh asking the company to contact the MPI to define whether its imported goods are included in the list of construction materials manufactured in the domestic market or not, as the basis for whether it will have to pay import tax.

The project is in a gray area of Decree 124/2008/ND-CP dated December 11, 2008. If its imported goods are included in the list, it will be exempt from import tax in accordance with Circular 04/2012/TT-BKHDT issued on August 13, 2013, according to the document signed by Hoang Viet Cuong, deputy director of the GDC.

The company has worked with the MPI to resolve the issue, but the ministry is now putting the decision to the government.

As of now, the steel complex is considered Vietnam’s biggest foreign-invested project with the registered investment capital of nearly $10 billion. The project is now under construction and is expected to begin operations in 2015.

By Nguyen Trang