April 27, 2018 11:57

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Why do we maintain sugar quota?

09:51 | 07/04/2018

VCN- The maintenance of tariff quotas for 4 commodities: Sugar, salt, poultry eggs, cigarettes is implemented in Vietnam, continuously, consistent over the years and meets the regulations of the World Trade Organization (WTO) and the domestic Law.

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120 tons of imported sugar of Hoang Nam Giang Trading Co., Ltd. has not completed the Customs procedures due to complain about the tariffs. Photo: Tuan Anh.

During the appellate administrative court's ruling on the "lawsuits against administrative decisions and administrative acts in the field of tax administration and claim for damages", the petitioner was Hoang Nam Giang Trading Company Limited and the defendant was the Manager of Ky Ha port Customs Branch (Quang Nam Customs Department). At the end of March 2018, the High Court in Da Nang did not make the final decision because of different interpretations in the application of legal regulations between enterprises and the management agency.

By tracking the court and relevant information in practice, as well as the legislative process of the domestic sugar industry, the Customs News reporter found that maintaining the tariff quota for sugar was very necessary for an agricultural country like Vietnam. This is also permitted by WTO when Vietnam negotiated and signed to join the largest trade organization in the world.

In fact, sugarcane is one of the most important economic sectors in the agricultural sector of Vietnam for many years. The area of sugarcane planting materials and dozens of sugar factories are extended from the northern border to the Central Highlands to the South of Vietnam. Regarding the sugar industry, we can easily note a number of factories and raw materials such as the Phuc Hoa sugar factory (Cao Bang); Son Duong sugar factory (Tuyen Quang); Lam Son sugar factory, Vietnam-Taiwan sugar factory (Thanh Hoa); Quang Ngai sugar factory; Gia Lai sugar factory; Khanh Hoa sugar factory; Bien Hoa sugar factory (Dong Nai); Tay Ninh sugar factory; and Hau Giang sugar factory with large material areas of tens of thousands of hectares, hundreds of thousands of sugarcane farmers and thousands of workers working in factories.

Therefore, in the course of negotiating to join the WTO or other bilateral and multilateral free trade agreements, Vietnam always seeks to maintain the tariff quota with sugar products to ensure life as well as income for hundreds of thousands of farmers across the country. Since then, Vietnam has legalized the application of tariff quotas in domestic legal documents.

Most recently, the Law on Foreign Trade Management (taking effective on 1 January 2018) has continued to introduce regulations on tariff quotas (from Article 20 to Article 22). In particular, the Law clearly states that "the Ministry of Industry and Trade announces the application of tariff quota measures and decides on the method of allocation of tariff quotas" (Clause 2 of Article 22).

According to the Minister of Industry and Trade, Mr. Tran Tuan Anh, the application of tariff quotas will be continued with 4 items including poultry eggs, salt, sugar, tobacco leaves. Minister Tran Tuan Anh noted that the application of tariff quotas to these 4 groups of commodities was a measure which Vietnam committed upon WTO accession.

Regarding the application of tariff quotas, in the course of elaborating and promulgating the Law on Foreign Trade Management, the Standing Committee of the National Assembly further analyzed the reasons for maintaining this measure. Accordingly, the application of import tariff quota is one of the necessary safeguards and in accordance with international practice. Import tariff quotas are only intended to distinguish the tariffs applicable to goods within the tariff quotas and tariffs applicable to goods outside the tariff quotas.

"The importation of non-quota goods will be subject to a higher tax rate, which is to meet the criteria for the application of safeguard measures in accordance with the international practice stated above", the Chairman of the Economic Committee National Assembly Vu Hong Thanh explained to the National Assembly.

Turning back to the above mentioned appellate administrative court, the representative of the People's Procuracy of Da Nang issued arguments, analysis and confirmed the application of tariff quotas for sugar products. This is in line with international treaties and the domestic Law.

Mr. Phan Van Chinh - the Director of Import-Export Department (the Ministry of Industry and Trade) in the interview with the Customs Newspaper also said that in principle, goods in the tariff quotas with the Ministry of Industry and Commerce license are entitled to preferential tax rates and, in addition to tariff quotas, they must pay normal tax (except for preferential tax rates under tariff quotas).

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Thus, it can be said that the application of tariff quotas for sugar and the remaining three groups of goods implemented by Vietnam in recent years is in line with international treaties and legal norms.

By Thai Binh/ Hoang Anh