Increase export tax on woodchips: MARD

Thursday, Dec 25, 2014 08:28

MARD also proposed instituting a 10 per-cent value-added tax, as well as a 25 per-cent corporate tax for enterprises involving in woodchip production. — Photo alphachem

HA NOI (Biz Hub) — The Ministry of Agriculture and Rural Development (MARD) has petitioned the State to increase export tariffs on woodchips from 0 per cent to 5-10 per cent, in a move to limit woodchip exports.

MARD also proposed instituting a 10 per-cent value-added tax, as well as a 25 per-cent corporate tax for enterprises involving in woodchip production.

Under a scheme on managing domestic woodchip production in the period from 2014-20, as approved by the ministry, wood processing firms were allowed to use a maximum of 70 per cent of wood material harvested from plantation forests to produce woodchips from now through the end of 2015. However, the ratio would then be reduced to 40 per cent in the five following years.

The scheme also prioritised the development of high value-added products, such as indoor and outdoor furniture, wooden handicrafts and expansion of new export outlets, such as Russia and the Middle East, while maintaining traditional markets such as the US, the EU, Japan and China.

Exports in 2015

Exports of Viet Nam's timber products in 2015 are likely to grow by 15 per cent from this year, said Huynh Van Hanh, vice chairman of the Handicraft and Wood Industry Association of HCM City.

During a workshop on Viet Nam's wood supply and demand on Tuesday, Hanh reassured businesses that despite a downturn, European companies were stepping up relocating the manufacturing of wood products to developing countries.

The US's imposition of anti-dumping duties on China, the world's wood processing hub, also offered an opportunity for Vietnamese companies to expand their export market share in the near future, he added.

As Viet Nam has pledged to comply with the US's Lacey Act and the European Union's Forest Law Enforcement, Governance and Trade Voluntary Partnership Agreement (FLEGT VPA), all wood produced in Viet Nam or imported from other countries now must come from legal forests.

Wood imports in Viet Nam currently comes from 26-30 countries, which have sustainable forest management, instead of 60 countries, as in the past, Hanh noted.

Tran Le Huy, General Secretary of Binh Dinh province's Forest Products Association, said timber from Sub-Mekong region countries, which were major suppliers for Viet Nam during recent years, had a high risk amid the nation's greater integration into the global market.

Since December 2014, Viet Nam has suspended the temporary import for the re-export of logs and semi-processed wood from Laos and Cambodia. This move might help domestic firms increase the value of their products, as more imported timber will be processed for export, he said.

Huy urged the wood sector to increase the manufacture and shipment of processed products with guaranteed origins, instead of raw materials, thus raising the global standing of Vietnamese wood products.

According to Hanh, the value of the country's wood exports would reach an estimated $6.5 billion by the end of 2014, up 15 per cent year-on-year. —VNS

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