Wooden plank exporters struggle with higher tax rates

The Vietnam Timber and Forest Product Association has sent an urgent petition to the Ministry of Finance, Ministry of Agriculture and Rural Development and Ministry of Industry and Trade about congestion of wooden planks

  set for export at ports.

Wooden plank products. — Photo baophapluat.vn

The congestion has been attributed to Document No. 4250/TB-TCHQ issued by the Viet Nam Customs on June 24.

The document regulates that wooden planks, mainly using materials from plantation acacia and rubber timber, are subject to HS 4407 and are regarded as semi-processed products subject to a 25 per cent export duty.

Viforest said the document had caused lots of hardship for many businesses, leaving wooden products congested at many ports.

Many businesses had been penalised for late delivery by trading partners, it said.

"The wooden plank products have been subject to HS 4418 so far, however, with the latest announcement of the Viet Nam Customs, this product will be subject to HS 4407 with an export tax rate of 25 per cent,” said Viforest Chairman Do Xuan Lap.

The wooden plank industry could bring hundreds of millions of dollars in export turnover, said Lap.

 

However, with the new regulation, businesses selling this products face the risk of default and bankruptcy.

Viforest has proposed the Ministry of Finance tell customs offices in localities to allow the products to be exported with a tax rate of 0 per cent and immediately review and cancel Document No. 4250/TB-TCHQ.

Phap Luat Viet Nam (Viet Nam Law) newspaper reported that in documents sent to the Viet Nam Customs, Dong Nai Customs Department and Bien Hoa Customs Department, Dao Thi Huong, director of Moc Cat Tuong Wood Processing JSC in Dong Nai Province, said that to produce a rubberwood plank, businesses have to go through many stages and high labour costs.

The enterprise requested customs agencies to re-apply the HS code 4418 to the wooden plank products so enterprises could maintain their operations and have opportunities to compete with countries like Malaysia, Thailand and Indonesia.

Viforest said that the annual export value of wooden plank products has contributed more than US$200 million per year to the export value of the wood industry, accounting for 3 per cent of total export value.

According to the Viet Nam Administration of Forestry, there are 146 enterprises producing wooden planks, with a capacity of about 570,000 cubic metres of products per year.

Statistics of Viet Nam Customs showed that the export value of plywood planks reached $332.7 million last year, 2.9 per cent of the total export value of forest products, a year-on-year increase of 16.7 per cent.

This export item reached $181.5 million in the first six months of this year, accounting for 3.4 per cent of export value of wood products, up 20.6 per cent from the same period last year. — VNS

 
 

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