Processing cassava roots at the Intimex Thanh Chương cassava starch processing factory in the central province of Nghe An. (Photo baonghean.vn)
Hanoi (VNA) – The
Ministry of Finance (MoF) has turned down proposals by the Vietnam Cassava
Association (VCA) for preferential policies similar to those for rice and sugar
to ensure its sustainable development.
For example, the association proposed
halving the 10 percent value added tax imposed on cassava, arguing that 80 percent
of the products are exported and contribute to the country’s export revenue.
In addition, the association asked for
high tariffs to be imposed on fresh cassava root exports to prevent them from
being sold through the border gates to China, in order to ensure the supply of
raw material for local processing factories.
The association sought the reduction of
import tax on fresh cassava roots from Laos and Cambodia to Vietnam to satisfy
the country’s processing demand.
The VCA also asked the Ministry of
Agriculture and Rural Development (MARD) to work with China’s Ministry of
Agriculture so that the latter would allow the export of cassava pulp from Vietnam
to the Chinese market, as it did with Laos and Cambodia.
However, most of the proposals have
been rejected.
The MoF said amending value added tax
rates on cassava starch and processed products from cassava fall under the
jurisdiction of the National Assembly. It also said the proposal was
inconsistent with the VAT reform policy.
Regarding the proposal on the
application of high tax rates to fresh cassava roots export, the ministry said
the export tax rate stipulated under Decree 122 is currently zero percent.
However, the ministry has predicted
that global demand for dry chips for E10 gasoline will continue rising, thus
the exports should be encouraged.
Furthermore, cassava is an industrial
plant that helps alleviate farmers’ poverty, especially those in remote areas,
contributing to political stability and national defence by creating jobs and
income. The farmers will suffer the most from the export tax hike, the MoF
argued.
Regarding the proposal to reduce the
import tax on fresh cassava roots, the MoF said the current import tax of 3 percent
is suitable to protect Vietnamese cassava growers.
According to the association, with an
area of about 550,000 ha and a capacity of 10 million tonnes per year, the
cassava planting industry attracts over 50,000 labourers working in industrial
plants and processing facilities, and 1.2 million farmers.
Each hectare of cassava yields profit
of about 11.6 million VND (515.5 USD), slightly lower than that of rice (14
million VND per ha per year).
Vietnam’s export value of cassava and
its products ranks second, behind Thailand, averaging 1-1.35 billion USD per
year.
In 2016 alone, the export volume of
cassava and products made from cassava reached 3.9 million tonnes, valued at 1.08
billion USD, ranking fifth among Vietnam’s key export crops.-VNA