Ministry of Finance proposes to reduce MFN tax on soybean meal to 1%

The Ministry of Finance is seeking comments on the draft Decree amending and supplementing a number of articles of Decree No. 26 of the Government on Export Tariffs, Preferential Import Tariffs, List of goods and absolute tax rates, mixed taxes, and import taxes outside tariff quotas.

Accordingly, in order to promptly meet practical requirements, remove difficulties for production and business, contribute to promoting administrative procedure reform and preventing trade fraud in classification and coding, based on the opinions of enterprises and associations, the Ministry of Finance has reviewed export and import tax rates for input materials for production to support domestic production and business.

Through review, the Ministry of Finance finds it necessary to amend and supplement a number of contents of Decree No. 26 to meet the requirements set forth in the current context, contributing to stabilizing the macro- economy , controlling inflation; promptly supporting and removing difficulties for domestic production and business enterprises.

At the same time, encourage businesses to continue investing, innovating technology, reducing product costs to increase competitiveness with imported products; contributing to stabilizing the market, especially for domestically produced products that meet demand.

Finance - Banking - Ministry of Finance proposes to reduce MFN tax on soybean meal to 1% — The Ministry of Finance proposed to reduce the MFN tax on soybean meal to 1%.

Regarding the proposal to adjust the import tax rate for raw materials for animal feed production (soybean meal), the Ministry of Finance said: The Ministry of Agriculture and Rural Development (MARD), the Ministry of Public Security and a number of Associations proposed to reduce the MFN import tax rate (export tax rate, preferential import tax rate) of soybean meal from 2% to 0%.

Regarding this issue, according to the Ministry of Finance, currently, the MFN tax rate for raw materials for animal feed production is basically very low, to protect domestic production in accordance with the ability to meet the domestic market.

For dried soybeans, 35% of domestic demand has been produced and 65% has been imported, so the current MFN tax rate for this item is 2% (compared to the current WTO ceiling commitment of 5%) which is appropriate, ensuring the principle of issuing the Tariff Schedule and tax rates, encouraging the livestock industry to proactively source domestic raw materials, ensuring the harmony of interests between livestock farmers and domestic and imported animal feed suppliers.

Soybean meal is one of the important raw materials for animal feed production, and a part of it is produced domestically (such as some cooking oil factories).

Adjusting the MFN tax rate downward may lead to reduced demand, affecting domestic production and increasing dependence on imports, thereby directly affecting the livestock farming activities of enterprises and people's lives.

Therefore, the Ministry of Finance proposed two options: Maintain the current MFN tax rate for soybean meal. Option 2 is to adjust the MFN tax rate for soybean meal from 2% to 1% (instead of reducing it to 0% as proposed by the Ministry of Agriculture and Rural Development and some Associations) .

Source