(vasep.com.vn) In February 17th 2012, representatives from three associations: Vietnam Association of Seafood Exporters and Processors (VASEP), Vietnam Textile and Apparel Association (VITAS), Vietnam Leather and Footwear Association (LEFASO) signed and sent a common document to Government Office, Ministry of Agriculture and Rural Development (MARD), Ministry of Industry and Trade (MOIT), Ministry of Finance (MOF) on petitioning exemption from environment protection duty levied on nylon plastic bags used in packaging for their exported products.
The garment, footwear and leather and fishery industries have become key economic sectors of Vietnam, contributing significantly to total export turnover of the country annually. In 2011, Vietnam’s textiles and garments exports reached US$15.8 billion, footwear and leather exports reached US$7.8 billion and seafood exports reached US$6.1 billion, accounting for 35 percent of total export revenue of the country. In 2012, textiles and garments exports is expected to reach turnover of US$19 billion; US$7.2 billion for footwear and leather exports; US$6.5 billion for seafood exports. These industries are taking competitive advantages of their quality and product price.
In the process of manufacturing textiles and garments, footwear and leather and seafood products; nylon bags are vital materials used popularly for wrapping and packaging products. Plastic bags are used to pack a product or a bunch of products in aspect of textiles and garments. In processing seafood, 200 grams, 1 kilogram, even 10 kilograms of nylon bags are used to pack.
In some cases, nylon bags are imported as the requests from customers. However, local producers prefer to use domestic bags to add value to domestic industries. The expense on nylon bags make up 5 percent of total production costs for garment products (about US$600 million per year for the whole industry); 1.5 – 2 percent for footwear and leather products; and about US$0.1 per 1 kilogram for seafood products. Costs for plastic bags account for a significant part of production costs of these industries.
Since January 1st, 2012, the environment protection law has taken effect, which leads to 30 - 50 percent increase in expenses on packing. Besides, other input costs tend to be higher which makes the price of exported Vietnam apparel, footwear-leather and seafood less competitive than that of other countries.
As regulated, nylon bag used as package for garment, footwear, and seafood products is not tax-exempt because it is not considered as an exported items. However, with the purpose of using Nylon bags in these industries, it can be considered as an exported items and should be tax-exempt. Nylon bags are crucial to ensure requirements of appearance, hygiene, preservation, food safety for garment, footwear, and seafood products before being exported.
When garments, footwear or seafood packed nylon bags are exported to foreign countries, this means that the bags also “go abroad” and do not stay in Vietnam, therefore, they will not affect the Vietnam’s environment. Therefore, nylon bags should be considered as exported items and be exempted from the environment protection tax.
Based on proper proposals of members, VITAS, LEFASO and VASEP petition competent agencies to put nylon bags (used for packing exported garment, footwear, and seafood products) in to items which are free from environment tax in order to assist producers to ease their difficulties and reduce production cost, increase their competitiveness and fulfill the exported target of 2012 and next years.