The Ministry of Finance has collected ideas from ministries and
businesses on reducing the export tax for natural rubber products to
make life easier for enterprises currently faced with high inventories
and decreasing selling prices.
After gathering
feedback, the ministry has proposed to reduce the export tax for
condensed latex rubber and mixed rubber from the current 3 percent and 5
percent rates to 1 percent. However, the tax ratio of other natural
rubber products is set to be raised from zero percent to 1 percent.
The Vietnam Rubber Association has been one of many voices calling for
the ministry to exempt export taxes for all natural rubber products.
It said the move was important because prices from
rubber exports had sharply reduced. The price last year was 2,795 USD
per tonne, representing a 30 percent decrease over 2011 when the price
hit a highest level of 4,562 USD per tonne. The export tax took effect
in 2011.
In the first seven months of this year,
rubber prices continuously fell. The average price in the first quarter
was 2,685 USD per tonne, 41 percent lower than the highest level in 2011
and a reduction of 8 percent year-on-year.
The
association said the low price will remain for the next few years due to
the global economic downturn, high inventories and increasing supply as
other countries have expanded their rubber production.
It added that 83 percent of Vietnam’s total annual natural rubber
output was exported. The export price by the end of this year was
forecast to reach at least 2,300 USD per tonne, much lower than that of
2011.
The tax will limit exports of rubber
businesses, therefore reducing the competitiveness of Vietnamese rubber
compared with neighbouring countries, it said.
Luu
Duc Huy, deputy director of the ministry’s Tax Policy said they have
finished the circular draft to amend the export tax, adding that if the
related ministries and agencies agree to the changes, they will be
implemented without delay.
Currently, the inventory
levels of the Vietnam Rubber Industry Group stand at about 60,000
tonnes. By the end of the year, the volume is expected to reach 200,000
tonnes.-VNA