Steel makers express opposition to a decision by the Ministry of Trade allowing Pomihoa Company to enjoy preferential tax of 5% on 110,000 tons of imported ingot steel.

According to steel makers, Pomihoa, will reap a profit of VND30bil from the tax incentive, and hinder the operation of other enterprises by selling steel on the market VND100-200 per kilo lower. On April 1, Pomihoa sent a dispatch to the Ministry of Trade (MOT), requesting tax exemption on ingot steel imports used for Tam Diep laminating steel plant that the company said, is located in a remote area. The proposal was approved by MoT.

However, the decision has encountered strong opposition from other enterprises, and has become so serious that the Vietnam Steel Association (VSA) gathered its members to discuss solutions to the problem. A representative from Hoa Phat Steel said that the tax exemption has created inequality in the market. In the current context of slow consumption, enterprises have to make every effort to balance production cost and sale price. “It is necessary to collect tax arrears to the state budget,” he said.

A representative from Mien Nam Steel Company shared the view, saying that MoT has lent a hand to Pomihoa to disorder the market. Enterprises pointed out that Tam Diep Steel Plant is located in a B-class, not C-class area, while current regulations only allow tax exemption to projects in C-class areas, areas with very difficult conditions.