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Ministries differ, milk tax issue put on PM’s table
As relevant ministries have not reached consensus on the taxation of milk material imports, the Ministry of Finance said it would report the issue to the Prime Minister for a decision.
Ministries’ representatives gathered yesterday to discuss the proposal by the Ministry of Agriculture and Rural Development (MARD) to raise the tax on milk material imports. However, no agreement has been reached on the issue.
In fact, the disagreement among ministries has been anticipated. MARD has been insisting on raising the import tax on milk material, which it believes is very necessary to protect the local husbandry. Meanwhile, other ministries, including the Ministries of Industry and Trade, and Finance, do not think this way
The Ministry of Finance (MOF) only agreed to raise the import tax on fresh milk materials and finished products from 3%, 5% and 7% to 15%, 10% and 20%, respectively, which have been suggested by MARD.
Meanwhile, the ministry does not think that it would be a wise move to raise the import tax on milk powder. The Ministry of Industry and Trade (MOIT) has also disagreed with the tax increase plan, fearing that dairy product prices will escalate.
MOIT agrees with MARD that the Government needs to have measures to support the milk cow husbandry in the current difficult period. As the world’s price has been decreasing sharply, domestic dairy producers prefer using import materials to domestic materials, as domestic materials have high production costs.
Nevertheless, the ministry still thinks that it is necessary to consider the possible impacts on the supply of dairy products if the tax is raised. Currently, domestic sources just can only meet 20% of the demand for milk materials. The sources only can meet materials for making some kinds of dairy products, while still cannot meet the demand for other industries.
Regarding the concerns about the possible price increases, a representative from the Big Cattle Breeding Association at the meeting showed figures to prove that the dairy product prices will not increase any further. The representative stressed that the world’s material prices have dropped by 50%, while domestic dairy producers are still deliberately keeping the sale prices at high levels.
MARD said that it has commitments from several fresh milk producers that they would not raise dairy products’ sale prices. The producers have also agreed to the import tax rate increase plan.
MARD said that if the import tax rate is still kept at low levels, the enterprises, which purchase milk from domestic farmers, will not be able to compete with the producers who use import materials.
VietNamNet, TP
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