September 25, 2007

Vietnam seafood producers to seek import tax exemption

The Vietnam Association of Seafood Exporters and Producers (VASEP) will submit its proposal of tax exemption on aquatic imports to the Prime Minister, through the support of the Ministry of Agriculture and Rural Development (MARD).

Current taxes are high -- 40 to 50 percent-- which creates difficulties for seafood processors, particularly on dealing with farmers for quality and price.

Vietnam annually imports around 20,000 tonnes of aquatic products for processing and re-exporting, while shipping 800,000 tonnes of seafood abroad.

The tax exemption will be a big help for seafood processors and exporters, because quality of imported aquatic products are usually higher than domestic ones, said VASEP general secretary Nguyen Dinh Hoe, adding that processors import aquatic products to meet clients' requirements.

Moreover, seafood processing industry is growing faster than harvesting industry, making factories run at lower capacity than designed. Majority of 470 seafood processing plants in Vietnam are operating at only 30 percent on their capacity due to raw material shortfall.

A representative from a processing company in Mekong Delta said the material imports will mostly serve exports, so that the imports will increase sharply as the tax is exempted.

Vietnam now imports raw materials from South Africa, Norway, Chile and some South American countries.

Last year, the country produced a total 3.69 million tonnes of aquatic products. Of this amount, two million tonnes or 54.2 percent were wild-caught (marine and inland) and 1.69 million or 45.8 percent were farm-raised. The production output is forecast to rise to 3.8 million tonnes in 2007.

Vietnam, the world's seventh biggest seafood exporter, is expected to rake in US$3.6 billion from seafood exports this year, up from US$3.3 billion in 2006.