Iron and steel used for tyre bead wire production will enjoy a zero pe cent import duty from May 2. (Photo:

Hanoi (VNA) - Iron and steel used for tyre bead wire production will enjoy a preferential import tax rate of zero percent from May 2, the Ministry of Finance announced in a recent circular.

Tyre bead wire is used to reinforce virtually all types of pneumatic tyres for motorcycles, passenger cars and trucks, as well as off-road and farming vehicles.

Circular No 51/2016/TT-BTC specifies that the zero-percent rate will be applied for non-alloy iron and steel in stick, bar or roll shapes, laminated with a diameter of less than 14mm. The rate will also be applied for iron and steel wires.

The ministry gave out the preferential import duty after suggestions by steel-maker Posco Vietnam Processing Centre Co Ltd, which is based in Nhon Trach 5 Industrial Zone in Dong Nai Province.

Hai quan, an online Vietnam Customs newspaper, reported that Posco and tyre makers in Vietnam currently have to import non-alloy hot-laminated steel sticks with a tax rate of 3 percent. This is because the country isn't yet able to make this product domestically.

Around 30 tyre manufacturers in Vietnam, including Sao Vang Rubber JSC, Da Nang Rubber JSC and Kumho, are seeing stiff competition from about 460 firms that import tyres from Thailand, Japan, China and Taiwan for domestic sale.

Posco proposed the import tax rate be lowered to zero percent for the steel sticks until this material can be made in Vietnam. This will encourage development of domestic supporting industries, the firm said.-VNA