Adjusting export tax rates on fertilizers was put into consideration in light of the fact that prices of fertilizers on the global and domestic markets kept increasing rapidly.
Source: Vinacam
The Ministry of Finance in the latest draft decree about preferential import and export tariffs proposed a five percent export tax rate on fertilizer products, except for NPK which was proposed to remain subject to a zero rate.
As NPK was currently in excess in the domestic market, the zero export tax rate was expected to promote the export of this type of fertilizer so as not to affect domestic production.
The draft was under revision by the Ministry of Justice before being submitted to the Government for consideration.
Adjusting export tax rates on fertilizers was put into consideration in light of the fact that prices of fertilizers on the global and domestic markets kept increasing rapidly.
The ministry pointed out that the domestic fertilizer production capacity was estimated to total 29.95 million tonnes per year which could meet the domestic demand by providing fertilizer plants operated at full capacity. Except for potassium fertilizer, Việt Nam must be reliant on imports because there were no potassium mines in the country.
The ministry’s statistics showed that in 2021, Việt Nam imported 4.54 million tonnes of fertilizers, worth nearly $1.5 billion, up by 19.4 percent and 52.6 percent, respectively, mostly from China which accounted for 42 percent of the import value. Import prices were about 27.8 percent higher than in 2020.
Việt Nam exported 1.35 million tonnes of fertilizer to earn $560 million last year, up by 16.4 percent in volume and 64.2 percent in value. Việt Nam’s fertilizer export prices increased by 41.2 percent against 2020.
The ministry proposed an export tax rate of 5 percent on inorganic fertilizer products, except NPK which was in excess in the domestic market. The tax rate of 5 percent was appropriate to lower fertilizer prices in the domestic market and stabilize the supply source, the ministry said.
Imposing an export tax on fertilizers is considered important to stabilize prices in the domestic market to ease the cost burden on the agricultural sector, especially in the context that fertilizer prices kept increasing in the global market over disruptions of supply sources.
Source: VNS