Draft amendments on special consumption taxes call for the application of the same rates to both imports and domestic products regarding automobiles, alcoholic drinks, cigarettes and cotton.

This is called the principle of national conduct. It is one of requirements for WTO membership and is also necessary for the country's global integration in general, said Minister of Finance Nguyen Sinh Hung.

Under the bill, the rates levied on automobiles, both imported and locally made or assembled, will range from 15 percent to 30 percent to 50 percent for cars of between 16 and 24 seats, six and 15 seats, and five seats or less, respectively.

Hung responded slightly angrily to worries about protectionism policies, saying, "there is no reason to force customers to buy automobiles at high prices."

He said that it is time for enterprises to harmonise their own interests with those of the State and customers and that the Government could not maintain protectionism policies as a way to abet car makers in continuously increasing prices.

The Government has already calculated a proper process for protecting domestic production in revising tax policies, and businesses should take advantage of this grace period to improve their products, reduce prices and increase the volume of parts produced at home.

Only by doing this, can businesses become strong enough to survive in an environment of fierce competition, when they are no longer under the State umbrella..

For cigarettes, the draft law stipulates a common tax level of 55 percent for both domestic products and products using imported materials in 2005 and 2006, and 65 percent in 2008. The increase of tax on cigarettes aims to limit the sale of unhealthy goods.

However, in unanimity with the opinions of many, the Compiling Board and the Verifying Agency stressed that the Government and localities should urgently map out plans to transform production mechanisms to avoid causing crisis to about 200,000 tobacco-planting farmers and about 15,000 workers at cigarette-producing factories.

The bill adds unprocessed products of farming, breeding, aquaculture and fishing, and imported semi-processed products to the list of products levied on by value-added taxes, in order to ensure non-discrimination.

In that spirit, the bill also stipulates a common tax level of 5 percent for semi-processed cotton regardless of origin. Hence, taxes levied on imported cotton will be reduced from 10 percent to 5 percent while taxes on locally-produced cotton are maintained at the existing levels.

The bill is a combination of all supplements and amendments to the Laws on Special Consumption Tax and Value-Added Tax. NA Vice Chairman Truong Quang Duoc said the NA will use this method to build a legal document that may adjust several laws, thus accelerating the process of legislative renewal in Viet Nam./.