Law catches up with steel tax evader

Two Vietnamese ministries have decided that importers who imported carbon steel but claimed it to be alloy steel to benefit from a zero-tariff policy would have to pay the 15-percent tax that is in force now.

Dinh Huy Tam, General secretary of the Vietnam Steel Association (VSA), said the finance and industry and trade ministries concluded at a recent meeting that claiming carbon steel is an alloy by adding a small quantity of boron is tantamount to fraud.

Prime Minister Nguyen Tan Dung had ordered the Ministry of Finance to inquire into an alleged case of tax fraud after the VSA said a company in the northern province of Hung Yen registered its imports with customs as alloy steel though they were not to enjoy the zero-tax benefit.

VSA members said Thanh Long Steel Company claimed 29,000 tons of steel imported from China in January and February to be alloy steel.

But tests later showed the products were just carbon steel with a small quantity of boron added. Generally, boron is added to steel products to increase strength.

After managing to evade the tax, Thanh Long was able to sell the imports at VND800,000-1 million a ton less than domestic products.

The tax on carbon steel imports was 12 percent at that time but it went up to 15 percent this month.

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