Seafood firms find bank guarantee fees costly

News 16:13 24/10/2012 Kim Thu
Seafood firms would have to pay as much as VND70 billion of bank guarantee fees a year when importing materials, estimated the Vietnam Association of Seafood Exporters and Producers (VASEP).

Assuming that Vietnam imported US$600 million worth of products every year, then tax payments would stand at US$120 million with an average import tax rate of 20%. If banks charged guarantee fees at 2.5%, importers would have to pay US$3 million, which given an interest rate of 12% would rise to US$3.36 million, or some VND70 billion, said Nguyen Hoai Nam, deputy general secretary of VASEP.

“Seafood enterprises lose VND70 billion each year, which will be included in production costs. Bank revenues are rising thanks to this source,” said Nam at a conference on the draft regulation on import tax grace period with guarantee of credit institutions held by VASEP on Monday.

Most seafood firms have to import materials at certain times in a year, when the sea is rough, making it impossible for fishing.

Enterprises said the requirement for bank guarantee imposes an extra expense on them. The General Department of Customs, one of the compilers of the draft regulation, said enterprises could use letters of credit for the next shipments as collateral.

However, Nguyen Xuan Nam, director of Hai Vuong Co. Ltd., stressed the compilers were standing away from taxpayers. “Not all enterprises open letters of credit. My customers in Europe in the current economic downturn also fear collateral at banks,” he said.

Enterprises should be allowed to gain profits first, and then tax revenues would rise, said Nam.

Nguyen Pham Thanh, general director of foreign-invested Highland Dragon Company, specializing in canned seafood, said he was surprised at this regulation.

He said investment incentives and friendly business environment were what attracted the foreign investor. “But changes and inconsistency in policies now make us very disappointed,” he stressed.

VASEP said it would send a report to the National Assembly and relevant agencies on this issue in the coming sitting on October 22. In addition, the association is asking for a zero import tax rate.

According to VASEP, seafood material imports picked up sharply in the last two years. Import value rose from US$247.7 million in 2007 to US$541 million in 2011.

In 2011, imported seafood materials contributed some US$900 million to the total export value. Seafood material import value is estimated at US$600 million this year.

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Chịu trách nhiệm: Ông Nguyễn Hoài Nam - Phó Tổng thư ký Hiệp hội

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