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Wood export loophole being exploited, claims Dong Nai
Dong Nai Forestry Product Processors’ Association sent a call for help to the provincial people’s committee, the Ministry of Industry and Trade and other relevant ministries, explaining timber materials have been exhausted.
Their petition has caught special attention from the public, because wood furniture enterprises account for 60 percent of the total firms in the country.
According to the association, wood furniture manufacturers, who have just picked themselves up after the economic downturn, tried to resume production. They have failed due to the lack of materials and escalating timber prices.
Hoa Binh Wood Processing & Export Company in Dong Nai province has complained that it seriously lacks processing materials.
Ta Duc Van, the company’s Deputy General Director, noted that timber prices have increased by 20-30 percent. Concurrently, the company cannot raise the export prices in their fixed contracts that last until August 2010.
Moreover, suppliers no longer allow deferred payments for materials and many companies lack enough capital to pay at the time of purchase.
Larger businesses can overcome these difficulties, but small firms cannot. Tran Son Lam, owner of a workshop that specializes in processing products for an export company, complained that the lack of capital is forcing his workshop to run at moderate levels. Lam must gather all his money, plus borrow from other sources, just to buy materials.
Timber prices and shortages have risen, enterprises say, because all available materials have been gathered by Chinese wood processing companies, which are trying to collect as much as possible.
The companies also assert that timber of different kinds is sawn into small planks, dried and then preliminarily treated, so that they can be exported to China as ‘refined wood,’ with an export tariff of zero percent.
This ‘loophole’ is being exploited by Chinese enterprises, allowing them to purchase wood in Vietnam at high prices so that Dong Nai firms are unable to compete.
In such a context, the Dong Nai Forestry Product Processors’ Association has sent a petition to the Dong Nai People’s Committee, the Ministry of Industry and Trade, General Department of Customs, the Vietnam Association for Wood and Forestry Products, asking them to verify exports that enjoy the zero percent tariff.
The association explained that it exports must be examined to find out if they are really refined products or ones used to evade taxation. If customs agencies determine that these are not refined products, they must impose the normal tax.
Pham Van Ban, Deputy Chair of Dong Nai Forestry Product Processors’ Association, stressed that, if the current situation cannot be curtailed domestic production will be hit hard.
vietnamnet, Tien phong
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