Furniture produced at Woodsland Joint Stock Company, Tuyên Quang Province. Wood processing and export companies were facing difficulties in getting VAT refunds. — VNA/VNS Photo Vũ Quang

HÀ NỘI — The Ministry of Agriculture and Rural Development has sent a document to the Ministry of Finance about removing difficulties in the refund of value added tax to wood processing and export companies.

The agriculture ministry said that timber harvested from domestic forests was the main and important source of supply which accounted for 74 per cent of the raw material demand and played an important role in promoting wood exports.

It said wood exports reached US$16.3 billion in 2021, representing a rise of 19.8 per cent against 2020, which contributed significantly to improving the daily life and income of poor people living in remote areas and promoting socio-economic development.

However, the tax management agencies were asking for the verification of the timber origin of forest owners that are households or individuals by commune-level people’s committees for the refund of VAT, which caused a lot of difficulties for wood processing and export companies as the time for processing the refund was prolonged.

Under the ministry’s Circular No 27/2018/TT-BNNPTNT dated November 16, 2018, for wood originating from scattered trees, domestic gardens and forests with a guaranteed legal origin, household or individual owners could make their own decisions on the exploitation and circulation without having to verify the origin by the State management agencies.

Thus, the requirement for origin verification was not appropriate, the agriculture said.

Regarding enterprises operating in processing and exporting interior and exterior joinery products, wood chips and pellets were considered to be at high risk of VAT refund, the agriculture ministry said that the tax management agencies needed to have more careful consideration in evaluating the risk level in VAT refund.

Removing difficulties in VAT refunds was important to create favourable conditions for enterprises, especially in the context that they were heavily hit by the prolonged COVID-19 pandemic and the domestic and global markets remained uncertain, the agriculture ministry said.

In early November, the Ministry and Agriculture and Rural Development received a document from the Việt Nam Timber and Forest Product Association about the difficulty in timber origin verification for VAT refunds. — VNS