Cigarette Importers to Lose Tax Benefits

Importers of cigarettes bearing foreign trademarks will no longer enjoy a reimbursement of the special consumption tax as of July 1, under a new decision by the Ministry of Finance, Vietnam News Agency reports.

 

As a transitional measure, cigarettes produced domestically with a foreign trademark under a customs declaration opened prior to July 1 will still be eligible for the tax reimbursement.

 

Currently, Vietnam has some 17 state-owned cigarette producers, who signed three business cooperation contracts with three foreign investors, namely British American Tobacco, Phillip Morris and Japan Tobacco International; a franchising contract with UK Imperal Tobacco Overseas Holdings and two joint ventures.

 

The tobacco sector produced 4.03 billion packs of cigarettes in 2006, of which foreign-invested entities made up a small slice of 40 million packs. In 2007, the sector plans for a production volume of 4.23 billion packs with 58 million from foreign-invested entities. (VNA)