Tax will lead to higher costs
Chu Van An, Deputy General Director of Minh Phu Seafood Company, has said that when packing shrimp products for export, the company needs a plastic bag and a paper bag. His company uses a lot of plastic bags to pack products for export.
Until January 1, 2012, the company had bought plastic bags at 20,000 dong per kilo. However, with the environment protection law, which taxes 40,000 dong per kilo of bags, the expenses on packing would increase by three folds, which would lead to the higher production costs.
Business director of V Seafood Export Company said that the company uses two kinds of plastic bags, a thin and a thick one. In general, the expenses on nylon bags account for 1.5 percent of the total expenses.
One may think that 1.5 percent is just a small sum of money. However, if noting that fish materials alone account for 80 percent, while the other kinds of expenses just account for 20 percent, one would see that 1.5 percent is relatively big. Therefore, he said higher pay for packing would burden the enterprise.
As nylon bags become more expensive due to the high tax, small merchants at traditional markets could reduce the volume of bags they use to save money. However, this cannot be done by seafood companies. Tran Van Linh, General Director of Thuan Phuoc Seafood and Trade Company said that every product has its specification, and the company cannot change it spontaneously.
Tax refund?
Linh has pointed out an unreasonable problem that the tax seafood companies have to pay for the environment protection is nonrefundable.
Under the Environment Protection Law, bag producers will have to pay this kind of tax. Of course, they would charge this kind of expenses on the sale prices of bags.
Linh thinks that once enterprises export products with bags, this means that the bags “go abroad” and do not stay in Vietnam, therefore, they will not affect the Vietnam’s environment. Therefore, producers must not be imposed this kind of tax. In case they have to pay tax already to buy plastic bags, they need to have tax refunded.
Environment protection may lead to unemployment?
Lawyer Tran Xoa, Director of Minh Dang Quang Law firm, said that some seafood companies have asked the General Department of Taxation about the tax refund.
Under the law, tax is also imposed on import bags, but the bags imported temporarily for re-export are exempted from the tax. Therefore, seafood companies are considering importing bags temporarily and then use the bags to wrapping exports. Once they export the products with the bags, they will not have to pay the environment tax.
Meanwhile, the representative of V Seafood Company has said that it is seeking foreign plastic bag suppliers. If the total expenses for bags are lower than 65,000 dong per kilo, it will import bags to save the production costs.
Chu Van An, Deputy Director of Minh Phu Seafood Company, has warned that 40,000 dong per kilo is too high, and that if seafood companies all consider importing bags, domestic bag producers would lose big clients. In this case, the environment protection law would lead to the higher unemployment.
Tran Van Linh, General Director of Thuan Phuoc Seafood Company, said that any tax policy needs to be applied in the harmonization with the current conditions and in the comparison of Vietnamese enterprises with foreign rivals.
Source: Dat Viet
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