(vasep.com.vn) Current high taxes on imported seafood products are causing difficulties for Vietnamese seafood companies, who are facing short supply of raw material for processing to export, according to VASEP.
Domestic raw material satisfies 60 – 65 percent of production capacity of processing plants. Over recent years, local companies have to import raw material from other countries to ensure production and exports in order to keep jobs for thousands of workers and raise competitiveness.
Between 2009 and 2012, imports of seafood into Vietnam doubled to reach US$700 million while the Ministry of Finances proposed to increase fish import tax. This would cause many obstacles for seafood companies in the context of tough competition in the global market.
Over the past of 2 years, Vietnamese exports of marine fish products keep decreasing mainly due to lack of raw material. Cephalopod products saw a drop of 3.5 – 10.8 percent in sales abroad in the 3 straight years. In Q.I/2014, tuna got the deepest year-on-year fall of 25.6 percent among marine products.
Some years ago, Vietnamese Prime Minister approved the strategy on development of fishery industry and the planning on development of seafood processing in Vietnam by 2020. Accordingly, seafood processing is considered as the drive for other branches including fisheries, aquaculture and logistic services. The objective is to build up a modern, consistent and sustainable processing chain from pond to table along with high competitiveness in the global market by 2020.
Vietnamese seafood exports are expected to reach US$8 billion by 2015 and US$10 billion by 2020. To reach this target, Vietnam needs to import 600,000 MT of raw fish (equal to US$1.3 – 1.5 billion) by 2015 and 1 million MT (equal to US$2 – 2.5 billion) by 2020.
So far, Vietnamese seafood companies have still been grappling with many challenges, as they are facing stricter technical and trade barriers set by importing markets and strong competition from other supplying countries. These challenges become tougher due to high tax and complicated procedures to import raw fish for processing to export and fulfilling supply contracts with foreign companies. Tax on seafood imported into Vietnam is higher than that imposed in other countries in Asia, which leads to weaken their competitiveness against other exporting countries like Thailand and China. The countries facilitate seafood imports in order to protect domestic fish stocks.
Currently, Ministry of Finances reduces taxes to zero for some fish species imported into Vietnam for processing to export. However, taxes on imported main species including shrimp, tuna or cephalopods are still high. Tax on imported shrimp is at 10-15 percent, for tuna 12 – 24 percent and 10 – 17 percent for cephalopod.
On April 17, 2014, VASEP sent an Official Letter No. 75/2014/CV-VASEP to Minister of Finances, Hoang Anh Tuan, to propose a meeting between leaders of Ministry of Finances and representatives of seafood companies to discuss Association's 4 recommendations on customs and import tax procedures.
VASEP is asking Ministry of Finances to consider reduction of tax to zero percent for some key fish species in short supply.
Previously, VASEP's recommendation on import tax reduction was accepted by Ministry of Agriculture and Rural Development (MARD) through MARD's Official Letter No. 3552/BNN-CB of November 16, 2011.