The Ministry of Finance of Vietnam will release decisions on lowering import tariffs of several kinds of materials and finished products, including dairy products, in the near days to increase supply on local market and curb price rises, said Truong Chi Trung, Deputy Minister of Finance.
Trung said that the higher price of input materials is the major reason for sharp price increases in the recent time, stressing that lowering the tax rates on several key products is the solution being considered.
Expert also said that the milk price increases in the recent time have had bad impacts on local consumers, and lowering taxes was the only solution to the problem.
According to Tran Bao Minh, Deputy Director of Vinamilk, under the WTO commitments, the tax rates on material imports remain relatively high, at 20-30 per cent, which could be seen as an effective tool to protect dairy farmers.
However, in fact, local milk output is mainly being used to make water-based products, while companies still have to use imports to make other products.
“The lowers of import tax on powdered material milk will not affect local farmers,” Minh said.
He also supported the proposal on lowering taxes on material imports, adding that the price increases had caused big difficulties not only for consumers, but dairy producers as well.
In fact, local material supply is meeting only 22 per cent of production, while the other 80 per cent can be fed only by imports. To some extent, the policy on local production protection has taken away opportunities to use dairy products for Vietnamese people.
He said that the retention of the tax rates would only help raise the tax collection for the state budget, while putting a heavy burden on both dairy companies and producers.
Head of the Animal Husbandry Department under the Ministry of Agriculture and Rural Development Nguyen Dang Vang agreed that lowering taxes would be a good solution for now.
If the prices of dairy products become unaffordable for people, they will turn their backs. And when people give up their habit of using dairy products, the local milk industry will not develop, as consumers decide the scale of production.
“Therefore, the lower tax rate will help stimulate consumption, thus encouraging the development of local herds of cows and the milk industry.” Vang said. (Youth, Vietnamnet)
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