Hanoi (VNS/VNA) - The Vietnam Cassava Association has proposed the Governmentdoes not implement a recent decision on value-added tax (VAT) refunds forcassava starch products as it will create difficulties for the cassava industry.

According toOfficial Letter 632/TCT-TTKT on value-added tax (VAT), the General Departmentof Taxation directs local tax departments to verify foreign customers duringprocessing procedure relating to VAT, leading to suspension of refund andarrears of VAT for cassava exporters.

The currentregulations on VAT arrears do not stipulate that the tax refund dossier must becertified by foreign customers to be eligible for a refund.

Theassociation said that determining the quantity of exported cassava can be donebecause the businesses must declare the export volume to the customs offices atthe border gates. The proceeds from the cassava exports are transferred via thebank. Therefore, the tax authority can completely control the number of cassavaexports based on documents at the customs and the bank.

Theassociation believes that if this is implemented, it will bankrupt localcassava enterprises. This dispatch will affect more than 1.2 million workers inthe domestic cassava industry. Hundreds of production facilities will have to stoppurchasing cassava, causing socio-economic instability in many localities.

At present,the cassava industry is facing many difficulties due to the impact of theCOVID-19 pandemic over the past two years. Many businesses no longer have moneyto buy raw materials from farmers so they are forced to stop production.

Meanwhile,Vietnamese enterprises are also facing fierce export competition with Thailandand Indonesia.

Togetherwith those difficulties, if the VAT refund problem is not resolved, it can leadto the collapse of the production chain.

Vietnam nowhas about 530,000ha growing cassava, mainly in difficult mountainous areas.

Cassava is atree with great potential and also is under the list of 13 national key farmingproducts by the Ministry of Agriculture and Rural Development, under theGovernment's programme on industrialising and modernising the agriculturesector and the rural areas.

In recentyears, the export turnover of cassava and cassava products has reached 1.35billion USD each year, becoming the second-largest cassava exporter in theworld, after Thailand.

According tothe General Department of Customs, in 2021, Vietnam's export of cassava andcassava products reached 2.87 million tonnes, worth 1.18 billion USD, up 2.4 percentin volume and 16.5 percent in value compared to 2020.

The averageexport price of Vietnam's cassava and cassava products in 2021 was at 409.8 USDper tonne, up 13.8 percent on the year.

In 2021,China was still the largest market for Vietnam's cassava and cassava products,accounting for 93.6 percent in volume and 92.9 percent in value. The export was2.69 million tonnes, worth 1.1 billion USD, up 4.1 percent in volume and 18.5 percentin value compared to 2020.

The averageexport price of Vietnam's cassava and cassava products to China in 2021 stoodat 409 USD per tonne, up 13.9 percent compared to 2020.

Expertsforecast that China would import more cassava and cassava products from Vietnamdue to favourable geographical conditions.

However,more than 65 percent of Vietnam's cassava and cassava products have beenexported to China via border gates in Lang Son, Quang Ninh and Lao Caiprovinces./.