Lower VAT urged for key exports
|Rice bags are loaded from ships at Saigon Port in HCM City. Producers and exporters of agro-forestry-fishery products seek a reduction in the value added tax in order to cope with low market demand and financial difficulties. — File Photo
HA NOI (VNS) — Reduction of the value added tax for agro-forestry-fishery products should be made to help producers and exporters cope with low market demand and financial difficulties, recommended the Agro-Forestry Processing and Salt Industry Department.
It suggested that a value added tax reduction be applied to sectors whose proportion of exports is more than 80 per cent.
The department also proposed cut in interest rates for the sectors' development investment preferential loans from the current 11.5 per cent to between 5 and 6 per cent.
"This is to encourage the manufacturers of innovative technology and equipment to produce high-value products," it said.
Besides issuing regulations to ensure good interest rates for producers and exporters, the department also asked the relevant ministries and bodies to offer timely credit with reasonable interest rates of roughly 9 per cent for the purchase, processing and export of the country's key export products, especially rice, coffee and tra fish.
The department, part of the agriculture ministry, also asked the State Bank of Viet Nam to scrutinise the loans of producers and processors so that these can be extended if the businesses have feasible projects.
The proposals were made as the industry was forecast to continue facing challenges due to low market demand and fierce competition, while the financial status of domestic producers remained restricted.
According to the Ministry of Agriculture and Rural Development, the country's farm, forestry and fishery export products earned an estimated US$2.32 billion in January, down 9.7 per cent against the same period in 2013.
Farm products were estimated to rake in $1.17 billion, down 17.9 per cent, while forestry products were to bring in $534 million, up 3.3 per cent and fishery products, $552 million, up 13.9 per cent.
Decreasing earnings were seen in several major export staples such as coffee, rubber, pepper and cassava products, with rubber suffering the maximum decline.
In January, the country exported 90,000 tonnes of rubber worth $199 million, down 17.5 per cent in volume and 32.8 per cent in value over last year's January.
The country's agro-forestry-fishery exports hit roughly $27.47 billion in 2013, up 1.8 per cent against the previous year. — VNS