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High export taxes slow rubber production
The rubber export target for this year of 880,000 tonnes is unlikely to be achieved since high export tariff rates of 3 to 5 per cent have caused many companies to limit production.
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| Employees of Thong Nhat Rubber Co make rubber belts. Higher export tariffs are slowing down production of rubber companies. | Southern Rubber Industry Joint Stock Co (Casumina) deputy director Le Van Tri said that his company has seen annual growth in exports of over 20 per cent in recent years, but the level of increase this year was likely to be only 5-10 per cent.
Tri urged the Government to delay the tax or domestic companies would be unable to compete on a world market already made challenging by the economic downturn. The global recession has, in particular, slowed auto production, reducing demand for rubber needed to produce tyres, he said.
Lower demand has already led to lower prices and tighter profit margins, he added, making the tax even more burdensome. In 2011, rubber latex could fetch about VND90 million (US$4,300) per tonne, but this has fallen already this year to about VND60 million ($2,900) per tonne.
Dong Phu Rubber Joint Stock Co chairman Nguyen Thanh Hai said that about 60 per cent of his company's total rubber output was for export. The Government regularly encouraged companies to step up exports, so the export tax was contrary to policy, he suggested.
Viet Nam Rubber Association general secretary Tran Thi Thuy Hoa disagreed, however, that the taxation levels were excessive, with current taxes levied only on certain products. But the association would be concerned if the Government were to apply the taxes to a wider range of products.
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