Green law turns red

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Báo Đầu Tư English - 34 month(s) ago 4 readings

Green law turns red

Scores of plastic firms face retrenching production in the face of the Environmental Protection Tax Law from early 2012.

Vietnam Plastics Association (VPA) chairman Le Quang Doanh said more than a month after the Law on Environmental Protection Tax came into force many member firms had complained about the law’s unclear and insufficient guiding documents.

“Firms are in a spin in shaping future production and business plans since there is no criteria as to what environmentally friendly plastic products are, meanwhile inspection mechanisms remain vague,” said Doanh.

Duc Anh Plastic director Truong Anh Luan said taxing plastic bags was a smart move, but improper enforcement of the law could break the local plastic packaging industry.

Tan Dai Hung Plastic chairman Pham Trung Cang said there were differences in PE plastic bag taxing practices. Particularly, thick PE cement plastic bags are taxed in Vietnam, while it is not being taxed in EU market.

Cang said it was not rational that every PE plastic bag was taxed and that was why his firm could not sell PE plastic packaging to Viet Nhat Fertiliser Firm, which recently shifted into importing the products from ASEAN country to supersede local items due to tax issues.

“Imposing VND40,000 ($1.9) per kg of PE plastic bags would make foreign firms doing business in Vietnam turn to ASEAN countries for importing the products, thus driving local firms in a bind,” said Cang.

VPA deputy chairman Ho Duc Lam said lack of criteria about tax free environmentally friendly plastic bags bothered firms.

“Vague regulations may mislead firms unless tax authorities introduce explicit instructions,” said Lam.

From that practice, the VPA has presented three proposals to competent state agencies. Accordingly, it proposes temporarily delay taxing plastic packaging, apply the Law on Environmental Protection Tax following a specific roadmap in which competent state agencies should hold dialogues with businesses to be able to present suitable roadmap and the VPA should be allowed to contribute inputs to guiding documents’ drafting process.

In 2011, the plastic industry housed 2,200 businesses providing jobs to 200,000 labourers. The sector’s export value came to $1.32 billion, surging 28 per cent against 2010. Its major export markets are the US, Japan and Germany.

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