Domestic latex and compound rubber producers said they are making lossesand on the brink of shutting down their facilities after being hit hardby a hefty 3 percent export tax.
The export price forVietnamese-made latex and compound rubber is usually 100-200 USD a tonnelower than rubber from Malaysia , Indonesia , and Thailand .
However, with the 3 percent export tax levied on the shipments,Vietnamese rubber prices increase by at least 80 USD a tonne, makingVietnamese rubber lose its competitive edge in overseas markets.
The Ministry of Finance decided to raise the export tax on natural andcompound rubbers from zero to 3 percent as of December 8, 2011. The dutywas imposed in a bid to "encourage the domestic rubber manufacturingsector, rather than focusing only on exporting natural rubber," theministry said.
The tax rate was considered reasonable lastyear when rubber export prices peaked at 6,000 USD a tonne, allowingrubber exporters to initially enjoy profits despite the 3 percent tax.However, exporters said they suffere big losses this year as rubberprices fell to only 2,700 USD a tonne.
Nguyen Quang Hop, arepresentative for Hung Thinh Rubber Co, told Tuoi Tre (Youth)newspaper that rubber producers will suffer losses if they continueproduction and sell the products at old prices to clients. He said newmachinery worth 400,000 USD that his company had imported from Swedenin late 2011 was now idle, as the 3 percent export tax forced hiscompany to shut down the facility.
Le Ba Tho, a salesexecutive from the Tay Ninh Rubber Co, said his company has to switch toproducing other rubber products to avoid the tax, although its exportstaple is latex, which accounts for 70 percent of total production.
Latex export turnover for his company thus dropped to only 30 – 40 percent in the first half of this year, said Tho.
However, he said, the new products have few markets, and his company has planned to return to latex production.
Rubber producers said it is unreasonable that only compound and latexrubber are subject to the export tax while many other kinds of exportrubber are not.
Moreover, while 70 percent of Vietnameserubber, mainly unprocessed types, are exported to China, the Governmentshould apply incentive policies for exports of latex and compound rubberto avoid the risk of depending too much on the Chinese market for latexand compound rubber exports, Hop said.-VNA
The export price forVietnamese-made latex and compound rubber is usually 100-200 USD a tonnelower than rubber from Malaysia , Indonesia , and Thailand .
However, with the 3 percent export tax levied on the shipments,Vietnamese rubber prices increase by at least 80 USD a tonne, makingVietnamese rubber lose its competitive edge in overseas markets.
The Ministry of Finance decided to raise the export tax on natural andcompound rubbers from zero to 3 percent as of December 8, 2011. The dutywas imposed in a bid to "encourage the domestic rubber manufacturingsector, rather than focusing only on exporting natural rubber," theministry said.
The tax rate was considered reasonable lastyear when rubber export prices peaked at 6,000 USD a tonne, allowingrubber exporters to initially enjoy profits despite the 3 percent tax.However, exporters said they suffere big losses this year as rubberprices fell to only 2,700 USD a tonne.
Nguyen Quang Hop, arepresentative for Hung Thinh Rubber Co, told Tuoi Tre (Youth)newspaper that rubber producers will suffer losses if they continueproduction and sell the products at old prices to clients. He said newmachinery worth 400,000 USD that his company had imported from Swedenin late 2011 was now idle, as the 3 percent export tax forced hiscompany to shut down the facility.
Le Ba Tho, a salesexecutive from the Tay Ninh Rubber Co, said his company has to switch toproducing other rubber products to avoid the tax, although its exportstaple is latex, which accounts for 70 percent of total production.
Latex export turnover for his company thus dropped to only 30 – 40 percent in the first half of this year, said Tho.
However, he said, the new products have few markets, and his company has planned to return to latex production.
Rubber producers said it is unreasonable that only compound and latexrubber are subject to the export tax while many other kinds of exportrubber are not.
Moreover, while 70 percent of Vietnameserubber, mainly unprocessed types, are exported to China, the Governmentshould apply incentive policies for exports of latex and compound rubberto avoid the risk of depending too much on the Chinese market for latexand compound rubber exports, Hop said.-VNA
