According to new policy of Ministry of Finance, tax will be reduced 50 percent for seven groups of essential goods including beef, pork, milk, domestic fowls, etc with current tax imposed from 5 percent to 50 percent in next 8th August. This makes consumers hope for a price cut of consumer products. However, after one month of enforcement, price of some goods, except for automobile and gas, is still high.
Price Reduction obviously implemented in Automobile and Gas
Automobile market has long been known for high price, which often serves for only high-income consumers so price fluctuation of such goods makes less influence on daily life. However, this market has made the quickest response to policy of price reduction. After price reduction of Ministry of Finance for old cares in 8th August, many leading international automobile brands in Vietnam, for example, BMW has lowered 1,500- 3,000 USD on average for per car.
After that, Huyandai Vietnam (HMV) has stated for price cut. Price cut of cars distributed by HMV will be at the level of 5- 10 percent but not applied for all cars. Particularly, the price of Crossover Vearcruz recently launched to market has been cut down from 68, 000 USD to 66, 500 USD (less 1,500 USD) for gas-driven engine and from 75, 000 USD to 72,900 USD (less 2,100 USD) for oil-powered engines. Mecedec- Ben has officially reduced price 1, 000 – 3,000 USD per car. This event will lead a wave of car price reduction of automobile companies in the next time. Another important commodity essential for students and economy- gas has been officially lowered 500 VND/ 1 liter since 16th August .
Other products waiting for a signal
After one month of tax policy implementation for price adjustment, other essential goods, together with such mentioned goods, has been at high price level or without changes. In Hanoi market, beef price are remained, even in some supermarkets, price of raw meats original from America, Australia, standstills. In some wholesale markets such as Long Bien, Den Lu, Hang Be, Hom, price of some food products has no longer increase but still stays at high level. While price of pork and beef is still remained (60, 000 VND/ 1 kg griskin, 70,000-80,000 VND/ 1kg), price of seafood including shrimps, river fish, sea fish and cuttle- fish, for increasing supply, has been slightly reduced around some thousands of VND (60, 000 VND/ 1kg water-fresh shrimp). However, price of domestic fowls, especially 80,000 VND/ 1 kg chicken, is likely to grow up. Domestic milk products have been reduced previously while foreign ones are still at high level. Milk products of New Zealand costs 20,000 VND/ 1 liter, S26 milk product of Australia costs 260, 000 VND per can. In the season of construction, purchasing power of building materials increasing makes price of some goods such as roof-covers, paint and cement higher.
According to analysis of Truong Chi Trung, deputy minister of Finance, depending on tax cut ratio, price of many goods will be reduced but not at once. He added that if lowering 10 percent of import tax, price of goods will just be reduced from 5-6 percent at the beginning and more after that. In some cases of increasing price of fuel, some kind of goods keep unchanged.
Nguyen Tien Thoa, Head of Price Control Department under Ministry of Finance, said that pressure of price cut does not force other goods to be at current price but mentions to factors concerning relationship among government, entrepreneurs and consumers to reach a more reasonable price.
Need for Reducing Production Cost of EntrepreneursRecently, Ministry of Finance has carried out closer inspection of steel products, milk and gas to find out the enterprises taking advantages of market turmoil for unreasonable price increase. It is shown that increasing price of such goods is resulted from increasing price of the world, for, example, price of steel rising nearly 20 percent over the end of 2006, price of ingredients of powdered milk rising 25-97 percent over January and gas rising 8 percent, etc. Nevertheless, costs of management, marketing and sales, which may be cut down in the remaining four months of the year, are still at high level.
Thoa uncovered that based on facts and requirements of inspectors, the gas entrepreneurs have made a commitment of price cut of 2,000- 3,000 VND per tank. Vietnam- Australia Steel has reduced 200VND/ kg and Thai Nguyen Steel has cut down 150-200 VND/kg in the Central. Other companies of steel, milk, gas have signed agreements about production costs for price stablisation till the end of this year.
After tax cut, price of goods, though not being remarkably lessened, is now at a more acceptable price. Along with a preliminary estimate, the inspectors will check the process of posting figures into accounts for the enterprises having tax incentives. In case such enterprises still has not adopted cut-rate price in response to reduction of tax, the Government will confiscate the profit gaining from tax incentives.
The enterprises providing yearly stable-price products, if increasing price, have to make report to Ministry of Finance for permission. Other Ministries will continue assign their inspectors inspection and control in other regions. The State inspectors are just in charge of conducting surveys on some kinds of goods, and controlling tax in mainly Hanoi and Ho Chi Minh city.
According to analysis of Ministry of Finance, tax reduction of 18 importing goods will cut down 1, 000 billions of VND of national budget. Moreover, if lacking consistent measures of controlling price and organizing distribution channels, the policy of cut-rate tax may cause adverse impacts on both consumers and entirely economic system.
Thi Van
Vietnamese
