February 26, 2008

Vietnam seafood industry seeks tax break for imported raw materials

The seafood processors of Vietnam recently asked the government to eliminate the 20-35 percent tariffs applied to imported raw materials, saying the tax break would further boost aquatic exports.

Hai Nam Ltd. Co. director, Nguyen Thu Sac, said that domestic seafood enterprises were hesitant from importing raw materials due to the import duties.

The tax rate applied to unprocessed seafood was generally higher than that applied by other countries, the Vietnam Association of Seafood Exporters and Producers (VASEP), said.

The tax is refundable once the processed products are re-exported, but enterprises worry that tax offices would hold large amounts of capital, while procedures for claiming the tax refunds remain tedious, VASEP said.

Vietnam currently imports raw materials from 40 countries and territories at a cost of US$90-100 million, equal to 4-5 percent of the nation's seafood export turnover, according to the Ministry of Agriculture and Rural Development.

Major exporters include India at 26 percent, China 18 percent, ASEAN countries 18 percent and Japan at 11 percent.

VASEP said raw seafood imports must increase 8-10 percent annually to meet processors' demand.

VASEP general secretary, Truong Dinh Hoe, explained that by increasing the availability of imported raw materials, Vietnamese seafood products could offer wider variety.

Vietnam's seafood exports topped US$3.5bil in 2007 and were estimated to reach US$4.25bil this year, marking a year-on-year increase of 13 percent, Hoe said.