Opportunity for Vietnamese goods as Switzerland scraps tariff on industrial product imports
Vietnamese products such as garment and textile, and leather footwear products ..are benefited. Photo: N.T |
The Vietnam Trade Office in Switzerland said that the import duties have been abolished for industrial products including intermediate input products for the production process such as raw materials, semi-finished products, machinery and equipment, salt and industrial salt, as well as consumer goods such as vehicles of all kinds, household appliances, clothes, shoes in chapters 25-97 of the HS code (except for some products under chapters 35 and 38 also considered agricultural products).
However, agricultural products, including live animals and plants, food, processed agricultural products, seeds, animal feed, aquatic products... are not considered industrial products. Therefore, import taxes still apply to these products.
In addition to eliminating import duties on industrial goods, a number of changes were also made to simplify customs tariffs and regulations on proof of origin. For many product types, detailed HS code classification due to different tax rates is no longer necessary. Therefore, from January 1, 2024, the number of Swiss HS tariff lines has decreased from 9,114 to 7,511.
For example, previously children's leather shoes had HS code 6403.5910 and were subject to a normal import tax of CHF173 per 100 kg. After the new regulations are issued, the tax rate is 0 and they will be grouped with other types in HS 6403.5900.
The removal of import taxes on industrial goods does not change the customs clearance process. Importers still have to declare imports and pay other fees and charges incurred upon the importation, including VAT.
According to the Vietnam Trade Office in Switzerland, based on updated 2022 data for Swiss imports, direct tax savings for businesses could be up to about CHF600 million (USD680 million).
However, according to preliminary studies, the removal of import taxes on industrial goods is expected to increase economic output and thus indirectly raising other tax revenues, offsetting about 30% of the loss in customs duties in the coming years. Looking at the Swiss economy as a whole, the positive effects will be significantly more than the expected tax revenue loss.
According to experts, this new policy contributes to reducing the financial and administrative burden for both Swiss businesses and consumers, thereby improving Switzerland's position as an economic, trade and industrial hub. It helps Swiss industry have easier access to raw materials and input products, with greater competitiveness and diversification. Thereby contributing to improving the productivity and competitive efficiency of Swiss companies, both in the domestic market and foreign market.
For Vietnam, the Vietnam Trade Office in Switzerland analyzed that, according to Swiss Customs data, Vietnam’s industrial goods account for about 90-93% of the country's total annual imports on average. Many of these products enjoy Swiss GSP (Generalized System of Preferences) tax.
Customs effectively execute export and preferential import tariffs VCN – To execute new regulations on export tariff, preferential import tariff, list of products and absolute, ... |
The Switzerland’s abolition of import tax on industrial products will make Vietnam's products equal to all other countries, there is not advantage (compared to countries that do not enjoy GSP) or there is disadvantage (compared to least developed countries(LDC)) on taxes. For some products such as textiles, footwear, etc., Vietnamese products will benefit more than competitors in the list of LDC.
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