VCCI Proposes Ministry Of Finance: No Import Duty Exemption For Low-Value E-commerce Orders

Concerns Over Import Duty Exemption For Low-Value Orders

According to the Draft Decree, imported goods valued at 1 million VND or less would be exempt from import duties. However, VCCI expresses deep concern about this mechanism.

VCCI’s analysis indicates that most imported e-commerce orders are of low value, often not exceeding 1 million VND. For instance, in 2024, Shopee recorded over 324.1 million imported products sold, generating 14.2 trillion VND in revenue, meaning an average value of only about 43,682 VND per product. This suggests that with the 1 million VND threshold, almost all imported e-commerce goods would benefit from duty exemption.

What are the consequences? VCCI emphasizes that this regulation would create significant inequality with domestically produced goods. Local businesses must pay import duties on raw materials used for production, while imported e-commerce goods are completely exempt. This implicitly creates an unfair competitive advantage for foreign goods, directly impacting the competitiveness of Vietnamese businesses.

Based on these analyses, VCCI recommends that the Ministry of Finance consider implementing a comprehensive import duty policy, without exemptions or reductions for imported e-commerce goods. Concurrently, VCCI proposes developing a simplified tariff schedule to apply to all e-commerce orders, regardless of their value.

Exemption From Licenses And Specialized Inspections: A Policy Loophole?

The Draft Decree also proposes exempting imported goods valued at 1 million VND or less from licenses, conditions, and specialized inspections, provided the total annual value per organization or individual does not exceed 48 million VND. This mechanism is designed for buyer-based (importer-based) management.

VCCI believes this regulation could create a major policy loophole. Similar to the import duty issue, applying the 1 million VND threshold has little practical effect as most current imported e-commerce goods are of low value. As a result, the majority of e-commerce goods would not be subject to licenses or specialized inspections, even if the total value of goods sold into Vietnam is substantial. This further exacerbates the inequality with domestic goods, which must comply with strict specialized inspection regulations.

VCCI argues that the current design still relies on the mindset of traditional import activities, which differs significantly from the characteristics of e-commerce. Instead of buyer-based management, VCCI proposes shifting to a seller-based management mechanism. This approach would allow for a focus on managing goods with high transaction volumes in the market, ensuring more effective risk-based management.

Other Proposals From VCCI

In addition to the above issues, VCCI also provided feedback on:

• Cases not eligible for exemption from licenses, conditions, and specialized inspections under Article 11.2 of the Draft Decree. VCCI recommends supplementing a provision that warnings are not applied to orders for which information has already been submitted to the system.
• Regulations on physical inspection of goods.
• Regulations on handling system failures.

These comments and proposals from VCCI demonstrate a deep commitment to building a fair and efficient business environment in Vietnam, especially as e-commerce rapidly develops. The Ministry of Finance will thoroughly review these proposals and make adjustments to the Draft Decree if deemed appropriate, ensuring a balance of interests and promoting the sustainable development of the economy.