Vietnam’s proposed aluminium export tax cuts draw VCCI support, with call for wider 0% rates

The Vietnam Chamber of Commerce and Industry (VCCI) has welcomed Vietnam’s proposed cuts to aluminium export taxes but urged the Ministry of Finance to go further by reducing rates to 0 per cent for additional products. The move could help domestic producers clear excess inventory, ease cash flow pressures and improve competitiveness.

The proposal comes as Vietnam’s Ministry of Finance prepares amendments to Decree 26/2023/ND-CP, which governs export and import tax rates. The changes aim to address difficulties businesses face amid volatile international markets, including aluminium producers seeking sales contracts for 2027.

The draft decree proposes reducing the export tax floor from 5 per cent to 0 per cent for six groups of aluminium and wood products (76.01, 76.03, 76.04, 44.02, 44.07, and 44.08). It also proposes cutting the export tax on aluminium coils used for can manufacturing (HS code 7606.12.32.10) from 20 per cent to 0 per cent.

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However, under the draft, the export tax on unworked aluminium (HS codes 7601.10.00 and 7601.20.00), aluminium bars, rods and profiles (group 76.04), and aluminium wire (group 76.05) would fall from 5 per cent to 1 per cent. VCCI also urged the government to eliminate the export tax on domestically produced aluminium sold to export processing enterprises (EPEs) and free trade zones for production purposes. 

They argued that the current tax disparity with imported aluminium, which can qualify for duty-free entry, could encourage buyers to favour imports over domestic supplies and weaken links between local producers and downstream manufacturers. 

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VCCI said aluminium production using electrolysis requires continuous furnace operation. If unsold inventory forces a shutdown, producers can face significant costs to dry the electrolytic cells and restart operations. The chamber also argued that the 1 per cent tax offers limited revenue to the state while requiring businesses to complete tax declarations, payments and customs-related procedures.

The proposed tax changes are particularly relevant to Vietnam’s aluminium industry as the government seeks to address sales difficulties at aluminium electrolysis projects, including the Dak Nong Metallurgical Plant, and release accumulated inventories.

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The chamber has asked the Ministry of Finance to reduce export taxes to 0 per cent for all product codes under groups 76.01, 76.04 and 76.05. 

VCCI said the changes would help domestic producers compete with imported materials, support continued factory operations, and potentially generate revenue through taxes linked to higher production.