Steel firms need tax cut roadmap

Steel firms need tax cut roadmap

As Viet Nam and the Custom Union of Russia, Belarus and Kazakhstan (VCUFTA) anticipate signing a free trade agreement in 2015, the Viet Nam Steel Association (VSA) advocated gradually reducing the steel import tariff over ten years rather than eliminating it immediately so that domestic steel producers could retain their competitiveness.

The steel sector already faced difficulties from low consumption, coupled with competition from low-priced Chinese steel, VSA chairman Ho Nghia Dung said. Meanwhile, Russia was the world's fifth-largest steel exporter in terms of production volume, churning out 70 million tonnes per year.

Russia also spent far less than other nations to produce steel, Dung said. In the 1980-90 period, Russia started producing steel using high-tech methods that saved fuel and time. To produce a tonne of steel embryo, Russian steel producers needed only 50 kWh, while Vietnamese producers needed 500-600 kWh.

Pham Chi Cuong, former chairman of VSA, warned that eliminating the steel import tariff in the beginning of 2015 would force many domestic small-and-medium d steel firms out of the game. The country had only a few large enterprises producing more than one million tonnes per year.

bizhub