Tax arrears could drown Vietnamese shrimp firms

By Danviet Newspaper   August 1, 2016 | 02:33 pm GMT+7

Shrimp producers could lose billions if they are forced to pay arrears on feed imports.

Scores of companies that raise baby shrimp for sale have expressed concerns about a new tax rate of 5 percent for imported shrimp feed, Danviet newspaper reported.

Truong Huu Thong, director of Thong Thuan Company, which produces baby shrimp and shrimp products, said that Vietnam has to depend on outside suppliers for shrimp feed.

Since 2011, the company has been importing a product branded Artemia to raise its shrimp with a zero tariff thanks to its HS code (Harmonized System used to classify traded products). However, customs authorities have reclassified Artemia under another code accompanied by a 5 percent tax rate.

“If the customs office backdates the tax for Artemia imports to 2011, we will have to pay VND5 billion ($225,000),” Thong said.

Phan Thi Thu Thuy, a representative from another shrimp producer, said: “We will be forced to close [the company] if the customs office demands tax arrears.”

Local shrimp enterprises said they can’t reclaim the additional costs incurred from a 5 percent tax rate from their buyers, and it would be impossible for them to find the funding to pay their tax arrears.

The Ministry of Agriculture and Rural Development said in a document sent to the Ministry of Finance that Artemia is the only shrimp feed available in Vietnam, and there’s no substitute at the moment.

It added that the zero tax rate encourages farmers to raise shrimp, contributing to the development of Vietnam’s shrimp industry. At the same time, the annual tax of VND21 billion ($944,000) that imports of Artemia would incur is a fraction of the average export value of $6 billion Vietnam collects from shrimp.

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers, also sent a request to the Ministry of Finance asking for the zero tax rate to remain.

In response, the ministry issued Decree 98 that states Artemia shrimp feed imports will be levied at three percent from August 13 this year. No information related to tax arrears has been announced.

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