Confusion over Thai Tax Waivers Lingers.

Byline: Malika Bhumivarn

Dec. 4--There have been a number of commentaries and reports in the media concerning the reduction of tariff rates on trade among Asean countries and how this is to be achieved. Unfortunately, various implementation dates, a range of tariff rates, and differing implementation procedures and policies have led to confusion.

Particular areas of confusion have been the perception that all goods traded among Asean member countries would be subject to a tariff rate of zero, and that the rate would be effective from Jan 1, 2002.

To achieve the Asean Free Trade Area (Afta) goal, the Common Effective Preferential Tariff (CEPT) was introduced as a mechanism to lower tariff rates on a wide variety of goods.

The first six signatories to the CEPT scheme -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- agreed to reduce tariffs to between zero and 5 percent on a large number of goods (Inclusion List) by 2002. These countries also agreed to eliminate import duties on all Inclusion List goods traded in Afta by 2010. The other four Asean member countries -- Burma, Cambodia, Laos and Vietnam -- have agreed to eliminate tariff barriers by 2015.

The goal of lowering and eliminating import tariffs is to increase trade among Asean members. Lower tariffs will lower import prices, which, in turn, will increase purchasing power for industries and consumers. It is hoped that increased competition, a lowering of costs and prices, and greater efficiency in the market will generate the social and economic benefits envisaged by the scheme.

The following requirements must be met in order to obtain import duty relief or exemption: