Vietnam will end its tax exemption on low-value imported goods, starting February 18, in a move that aims to regulate e-commerce and boost local consumption. This change, outlined in Decision 01 by Deputy Prime Minister Ho Duc Phoc, impacts goods valued below VND 1 million (approximately $39.3), which were previously exempt from VAT and import taxes since 2010, reports the Investor (VN).
The Ministry of Finance emphasized that the current exemption, particularly on goods delivered through express services, is outdated as e-commerce rapidly expands. Countries like the UK, Australia, Thailand, and Singapore have already abolished similar VAT waivers on low-value goods.
The policy shift comes amid a surge in small-value imports, particularly from China. E-commerce platforms like Lazada and Shopee have seen rising demand for products valued below VND 200,000 ($7.87), which account for over half of all online sales in Vietnam. On average, Vietnamese consumers spend $1 billion per month on online shopping, with an estimated four to five million small-value orders shipped daily from China to Vietnam.
According to the Ministry of Finance, the total value of goods imported via express delivery in 2023 reached VND 27.7 trillion ($1.08 billion). With the tax exemption lifted, the government anticipates an increase in annual VAT revenue of about VND 2.7 trillion ($106.2 million).
Vietnam's retail e-commerce market is expected to surpass $25 billion in 2024, marking a 20% year-on-year growth. The e-commerce tax revenue also saw a 20% rise in 2024, totaling VND 116 trillion ($4.56 billion).
Bd-pratidin English/ Jisan
