The new decision officially revokes an order dated November 30, 2010, that established the value threshold for VAT-exempt imported goods sent via express delivery services.

The decision aligns the country’s tax policies with international practices, ensures consistency within the current tax regulatory system and follows the state’s policy direction of expanding the tax base, GDC said.

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It is also expected to create fair competition between local and imported goods, promoting local production, a domestic media outlet reported.

If low-value goods worth less than VNÐ1 million ($39.4) are subject to a 10-per cent VAT, the state budget revenue may rise by an estimated VNÐ2.7 trillion.

Customs agencies have been asked to collect VAT on low-value imports. Until the customs system is fully upgraded, officers will face an increased workload in manually processing declarations and verifying tax payments, making the management and tracking of tax data more challenging.

Fibre2Fashion News Desk (DS)