The Ministry of Finance in the latest draft decree about preferential import and export tariffs proposed a five per cent export tax rate on fertiliser products, except for NPK which was proposed to remain subject to a zero rate.

As NPK was currently in excess in the domestic market, the zero export tax rate was expected to promote export of this type of fertiliser so as not to affect domestic production.

The draft was under the revision of the Ministry of Justice before being submitted to the Government for consideration.

Adjusting export tax rates on fertilisers was put into consideration in light of the fact that prices of fertilisers on the global and domestic market kept increasing rapidly.

The ministry pointed out that the domestic fertiliser production capacity was estimated to total 29.95 million tonnes per year which could meet the domestic demand providing fertiliser plants operated at full capacity. Except for potassium fertiliser, Viet Nam must be reliant on imports because there was no potassium mines in the country.

The ministry’s statistics showed that in 2021, Viet Nam imported 4.54 million tonnes of fertilisers, worth nearly $1.5 billion, up by 19.4 per cent and 52.6 per cent, respectively, mostly from China which accounted for 42 per cent of the import value. Import prices were about 27.8 per cent higher than 2020.

Viet Nam exported 1.35 million tonnes of fertiliser to earn $560 million last year, up by 16.4 per cent in volume and 64.2 per cent in value. Viet Nam’s fertiliser export prices increased by 41.2 per cent against 2020.

The ministry proposed an export tax rate of 5 per cent on inorganic fertiliser products, except NPK which was in excess in the domestic market. The tax rate of 5 per cent was appropriate to lower fertiliser prices in the domestic market and stabilise the supply source, the ministry said.

Imposing an export tax on fertilisers is considered important to stabilise prices in the domestic market to ease the cost burden on the agricultural sector, especially in the context that fertiliser prices kept increasing in the global market over disruptions of supply sources. — VNS