Vietnam’s rubber industry is facing many difficulties from the world market and problems due to internal policy factors. Therefore, enterprises in the rubber processing, processing and exporting industries need the attention of the Ministry of Finance so that tax policies can be removed faster and better, supporting the development of the rubber industry…
At the seminar “Remove difficulties and promote sustainable rubber industry development” jointly organized by the Vietnam Rubber Association and the Vietnam Rubber Industry Group on November 8, 2022, in Ho Chi Minh City , businesses believe that some tax policies cause problems and difficulties for rubber businesses.
Rubber cultivation is facing many difficulties.
DATE OF TAX REFUND CAUSES BUSINESSES
According to the Vietnam Rubber Association, rubber exports in 10 months of 2022 reached 1.7 million tons, bringing in 2.8 billion USD, up 11.2% over the same period last year. The types of rubber exported from Vietnam are still a mixture of natural rubber and synthetic rubber: Latex, SVR 3L, SVR 10, RSS3, SVR CV60… The Chinese market accounted for 99.7% of the total. volume of natural rubber and synthetic rubber exports of the country
Rubber exports in the first half of the year grew strongly, but from September 2022 to now, rubber exports have increased in volume, but decreased in price, leading to a decrease in turnover value. According to statistics of the General Department of Customs, Vietnam’s rubber exports in the third quarter reached 609.17 thousand tons, worth 930.86 million USD, up 6% in volume, but down 1.8% in value compared to the previous quarter. same period in 2021.
In the third quarter and October 2022, the average export price of most types of rubber is in a downward trend compared to the same period in 2021; in which, the mixture of natural rubber and synthetic rubber decreased by 5.5%; latex by 6%; SVR 3L down 7.1%; SVR10 down 5.9%; RSS3 dropped 7.1%; SVRCV60 decreased by 8.2%; RSS1 down 10.6%…
According to the Vietnam Rubber Association, in the last two months of the year, Vietnam’s rubber exports are still facing difficulties because the dollar has entered an uptrend as a haven against inflation. Rubber is no exception when the price of latex has decreased during the period when the USD has increased strongly.
“The pressing problem is that rubber exporters will be refunded after exporting, but the waiting time is too long, and some businesses still have a tax refund of hundreds of billion dong. This makes it expensive to pay interest on bank loans for the amount of capital temporarily paying value added tax.”
Mr. Vo Hoang An, Vice Chairman of Vietnam Rubber Association.
Mr. Vo Hoang An, Vice Chairman of the Vietnam Rubber Association said that the competition between the producing and exporting countries of natural rubber is becoming more intense in terms of price. On the other hand, the structure and types of natural rubber in Vietnam are still heavily dependent on the consumption market of China, facing many difficulties in penetrating other large markets such as the US, Japan, and Europe.
Meanwhile, domestically, a number of tax policies cause problems and difficulties for rubber businesses such as having to declare value-added tax for preliminarily processed rubber in the commercial business stage.
If this difficulty is not removed, rubber exports will not meet the output potential of more than 265,000 smallholder households (accounting for over 60% of national output), in the context of prolonged low prices and high demand. su decreased. Some enterprises have reduced rubber exports or switched to other agricultural products.
Mr. Nguyen Viet Tuong, General Director of Dak Lak Rubber Joint Stock Company raised the issue: Preliminarily processed agricultural and aquatic products are still enjoying the policy of not having to declare, calculate and pay value added tax at the stage of trading business. commercial. However, preliminarily processed rubber products that are also in the group of horticultural products are not generally applied but are subject to a value-added tax of 5%, causing great difficulties for rubber exporters. .
“Although, businesses will be refunded value added tax after exporting, but the waiting time for tax refund must be from 4 to 9 months. In the current difficult financial situation, there are businesses that have paid tens of billions of dong in value-added tax, no longer have capital to serve production and have to wait for tax refund, “said Tuong.
Ms. Tran Le Thu, representative of Hoa Thuan Trading Co., Ltd., said that businesses that buy latex from many different localities have fully paid taxes in localities, but when completing tax refund procedures in Ho Chi Minh City, they have to pay taxes. must wait for tax authorities to verify invoices in provinces.
“The Tax Departments of the provinces have not had a connection, causing delays in verification, delay in tax refund for businesses, while the tax amount paid by the company is more than 50 billion VND. With this situation, the company has had to cut down its operations, sometimes even if there are orders, they do not dare to accept it because they do not have the capital to carry out import and export activities”, Ms. Thu stated in fact.
RUBBER WOOD IS ALWAYS BENEFITS TREATMENT
Responding to the business issue raised, Ms. Tran Thi Tuyet, Tax Policy Department, Ministry of Finance admitted, if compared with other crop products such as coffee, cashew, etc., the application of value-added tax rate. 5% for primary latex and 10% for processed latex seems unfair.
However, the calculation of value-added tax will help manufacturing enterprises to deduct inputs, if value-added tax is not calculated for preliminarily processed latex, businesses are not allowed to deduct inputs for tax refund. . Therefore, businesses and associations should consider the proposal to exempt value added tax for preliminarily processed rubber latex, “said Ms. Tuyet.
Mr. Tran Ngoc Thuan, Chairman of the Vietnam Rubber Association said that the rubber industry annually contributes 7-8 billion USD to the export turnover of the country, with 3 main products including: natural rubber (high latex). rubber), industrial products from rubber and rubber wood. Of which, the figure of $2.8 billion in turnover in 10 months is only the export of rubber latex.
“Other crops and livestock are entitled to tax exemption, while rubber tree wood when harvested and sold is subject to a high tax rate of up to 20%. It is not appropriate to not include rubber plantation timber in the beneficiaries of preferential tax rates for crop products.”
Mr. Tran Ngoc Thuan, Chairman of Vietnam Rubber Association.
According to Mr. Thuan, rubber wood is also becoming a great source of income. After 20-25 years of latex harvesting, rubber trees will be harvested for replanting and continuing the next cycle. The liquidation of rubber trees is like other crops and livestock, when liquidation has a recovery value.
Regarding financial policy for land, a representative of Chu Prong Rubber One Member YNHH Company said that in order to replant, businesses must focus investment capital on restoration, new planting and care for 6 days. – 8 years.
“In order to fulfill the land rent obligation during the basic construction period of the re-cultivated rubber area with no revenue, businesses are forced to borrow capital, putting more financial pressure on businesses. The land rent will be accounted into the investment cost of the replanted rubber garden, calculated depreciation into the product cost, increasing the cost, leading to a decrease in the competitiveness of Vietnamese rubber compared to other countries. representative of Chu Prong Rubber Company emphasized.
From the feedback of businesses, the Vietnam Rubber Association proposed the Ministry of Finance to consider applying the value-added tax policy to preliminarily processed rubber latex like other preliminarily processed agricultural and aquatic products; Considering the application of preferential corporate income tax policy for income from the harvest of liquidated rubber tree wood like other crop products; Consider applying the land rent exemption policy for the planted area of the replanted rubber orchard during the construction period.
