Ministry lowers polypropylene tax 2% in March
Vietnamese plastic firms that import polypropylene as production material can reduce their production costs as the finance ministry has reduced the tax on polypropylene by 2%.
Under a new circular released in late January, which will come into effect on March 6, the new tax rate on polypropylene is 1%, down 2% from 3%, imposed by the finance ministry in the previous circular released in 2013.
Viet Capital Securities Corporation (VCSC) wrote in a report that the lower tax rate would help plastic firms to reduce their expenditure on importing polypropylene from overseas suppliers for production purposes.
These plastic companies include Saigon Plastic Packaging JSC (SPP), PP Pack Marking JSC (HPB), Tan Dai Hung Plastic JSC (TPC) and Binh Duong PP Pack Making JSC (HBD), besides Vinh Plastic and Bag JSC (VBC).
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Meanwhile, the largest companies in the plastic sector such as Binh Minh Plastic JSC (BMP), Tien Phong Plastic JSC (NTP), Dong A Plastic JSC (DAG) and Vietnam Electric Cable Corporation (CAV), besides Vinh Khanh Cable Plastic Corporation (VKC) and An Phat Plastic and Green Environment JSC (AAA) will not benefit from the circular as they use polyvinyl chloride as the input material for production.
The BIDV Securities Corporation (BSC) wrote in a forecast for this year that local plastic companies might face business problems as some European countries have abandoned the use of plastic bags and are encouraging their people to use degradable bags, while the United States has also extended the anti-dumping tax on Vietnamese plastic bags.
