Goods imported under one million VND via express delivery will not be tax exempt

The tax exemption policy for small value goods is applied according to Decision 78/2010 of the Government (while the Value Added Tax Law does not mention this issue). This is done by the Government in accordance with the Tokyo Convention commitments. Accordingly, imported goods worth less than one million VND sent via express delivery service are exempt from import tax and input VAT (import stage). Gifts and donations are also exempt from import tax according to Decree 134 guiding the Law on Import and Export Tax.

In Decision 01 signed by Deputy Prime Minister Ho Duc Phoc on January 3, the Government annulled Decision 78 above. Accordingly, imported goods worth less than one million VND imported via express delivery will no longer be exempt from import tax and VAT from February 18.

Previously, explaining the suspension of tax exemption, the Ministry of Finance said that many countries such as England, Australia, Thailand, Singapore… have abolished VAT exemption regulations for small-value imported goods. Many trade facilitation project (TFP) experts also recommend that Vietnam consider abolishing this regulation.

In addition, the tax exemption policy for small value goods has been issued since 2010, when the customs declaration system was purely manual. At that time, this tax exemption helped speed up customs clearance time and reduce the number of goods that had to be declared and paid tax. But now, this policy is no longer appropriate because e-commerce has grown very rapidly over the years.

“The removal of tax exemption regulations ensures fairness and encourages consumption of domestically produced goods,” the Ministry of Finance said.

In fact, in the past few years, small value goods delivered by express delivery have mainly been purchased directly by domestic consumers from abroad, through two main channels: international shops on e-commerce platforms in Vietnam. countries such as Shopee, Lazada, Tiki, TikTok Shop and cross-border retail platforms such as AliExpress, Shein, Temu.

According to the e-commerce report for the first 9 months of last year by e-commerce data platform Metric, goods under 200,000 VND accounted for more than half of sales in the entire Vietnamese e-commerce market. Vietnamese people spend 1 billion USD shopping online every month.

It is estimated that every day about 4-5 million small value orders are shipped from China to Vietnam via e-commerce platforms.

Therefore, eliminating tax exemption is estimated to contribute to additional resources for the state budget. Last year, the total amount of goods worth less than 1 million VND imported through express delivery services was 27,700 billion VND. Correspondingly, budget revenue from VAT may increase by about VND 2,700 billion after stopping tax exemption.

Authorities assess that the new regulations may increase tax declaration procedures for small value goods. But the information technology system for customs management at ports and warehouses has been completed, improving customs clearance capacity, so the management of goods imported via express delivery, including small value goods, will be carried out. Focused and fast, without interruption.