Thursday, 06/10/2011 15:07

Ministries differ on rubber tariff draft

The Ministry of Finance has received different feedback from 7 ministries and agencies about its draft decree of rubber export tariffs.

Under the draft issued in July, the ministry suggested increasing the export tariff of natural rubber coded HS 4001 from 3 percent to 5 percent and imposing a 5 percent tax on the currently tax-free synthetic rubber (4002).

The ministry also demanded that reclaimed rubber (4003) and compounded rubber (4005) remained to be tax-free since these two products are rarely used domestically.

This draft has received different feedback from 7 ministries and agencies.

The Ministry of Planning and Investment reiterated the Export Tax Law 2005 which says that the tariff of up to 20 percent could only be imposed on natural rubber, not synthetic rubber.

This ministry agreed to an increase in natural rubber tax, but said it should be reasonable.

The Ministry of Industry and Trade, however, had a different idea.

It suggested taxing synthetic rubber by 5 percent while removing the tariff on natural rubber to encourage its exports.

Disagreeing with both of the above suggestions, the Ministry of Agriculture and Rural Development said that the government’s plan for rubber development to 2015 had offered many incentives to boost the domestic rubber industry, including a tax-free export policy.

The agriculture ministry thus demanded that both natural and synthetic rubber to be exempted from export duties.

The Vietnam Rubber Corporation, which accounts for 40 percent of the country’s total rubber production, said natural rubber should be tax-free while the export tariff of 5 percent and 3 percent should be imposed on synthetic rubber and compounded rubber.

According to the General Customs Department, Vietnam earned US$340 million from a rubber export turnover of 80,000 tons in July.

Total export turnover from the beginning of this year to July topped $1.6 billion with 369,000 tons, up by 11.5 percent in volume and by 77 percent in value compared to the same period last year.

China is still Vietnam’s largest rubber export market, followed by Malaysia, South Korea and Taiwan.

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