Phone Makers Need Tax Breaks

August 29, 2013 Taxation in Vietnam

Ant's PhoneHANOI – Phone manufacturers in Vietnam are being pushed out of the national market by foreign companies which enjoy more tax breaks then the local competitors.

According to the Vietnamese news website Tri Thuc Tre, the largest mobile network operator in the country Viettel Mobile has addressed Prime Minister Nguyen Tan Dung and the Finance Minister Dinh Tien Dung with claims that local phone manufacturers need more tax breaks in order to compete with imported handsets.

In their letter Viettel explained that the current tax system is disadvantageous for local businesses as the government levies a tax of up to 25 percent on the import of the materials and components needed to make a mobile phone, while no duties are levied on the import of already assembled handsets.

They added that some foreign firms, such as Samsung, have also been granted special tax exemptions from the import duties on the vital components, reducing operating costs far below those faced byViettel.

In order to alleviate the unfair tax treatment, Vittel urged the Prime Minister to address the situation by providing local manufacturers with reduced import taxes, by introducing new tax breaks for research and development activities, and by providing tax exemptions for local retailers selling phones produced in Vietnam.

Photo by Spencer E Holtaway

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