Vietnam’s Ministry of Industry and Trade Proposes Import Tax on Low-Value Foreign Goods Sold via E-commerce Platforms

Vietnam’s Ministry of Industry and Trade has proposed the imposition of import taxes on low-value goods—under VND 1 million (approx. USD 40)—sold through cross-border e-commerce platforms. The move aims to curb the influx of cheap, low-quality foreign products and safeguard domestic production.

The proposal was submitted as feedback to a draft decree by the Ministry of Finance, which currently recommends exempting import tax on e-commerce orders valued at VND 1 million or less. Under this draft, individuals and organizations would also be subject to an annual tax-exempt cap of VND 48 million (approx. USD 1,900).

However, the Ministry of Industry and Trade opposed this exemption, arguing that allowing duty-free entry for such goods undermines local producers and risks market saturation with substandard imports. The Ministry noted that several countries in the region—such as Thailand, Indonesia, Singapore, and Malaysia—have tightened tax regulations and technical inspections on low-value cross-border e-commerce imports for similar reasons.

“This approach helps prevent the widespread presence of cheap, poor-quality foreign products and ensures a level playing field for domestic manufacturers,” the Ministry stated. It also highlighted that major economies, including the United States, are adopting reciprocal tax measures to revive local industries.

Foreign Sellers Gaining Ground on Vietnamese E-commerce Platforms

According to e-commerce analytics platform Metric, foreign sellers now account for nearly 11% of total storefronts on Shopee Vietnam, offering products at an average price of VND 43,682 (less than USD 2) with a wide variety of models and styles.

Despite these concerns, the Ministry of Finance maintained in its explanatory notes that e-commerce transactions typically involve low-volume, personal-use items, making licensing and regulatory compliance impractical. The ministry emphasized that the proposed VND 48 million annual threshold would already discourage mass tax-free imports while allowing Vietnam’s cross-border e-commerce to grow in alignment with global trends.

However, the Vietnam Chamber of Commerce and Industry (VCCI) has also voiced opposition, stating that the VND 1 million threshold for tax exemption could perpetuate tax policy imbalances and put local manufacturers at a disadvantage.

VCCI cited data showing that most cross-border e-commerce orders fall below the VND 1 million mark. In 2024 alone, more than 324 million imported products were sold on Shopee, generating VND 14.2 trillion in revenue. This translates to an average product value of just VND 43,682, meaning the majority of these imports would remain untaxed under the current draft.

Moreover, VCCI pointed out that while domestic manufacturers must pay import duties on raw materials, tax-free treatment of competing finished goods from abroad creates a significant disparity, giving foreign sellers a competitive edge.

As Vietnam’s e-commerce sector continues to boom, the policy debate over tax fairness and the protection of local industries is gaining urgency.

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Source: Vietnam Insider