MoF bends again on rubber tax, now zero

August 29, 2014 | 17:21

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The abolition of the export tax on rubber, starting October 2, is expected to ease some of the difficulties currently plaguing rubber firms.

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According to Circular 111/2014 issued by the Ministry of Finance, the export tax rate on rubber will be reduced to 0 per cent from the current 1 per cent.

Listed rubber firms saw a sharp on-year drop in profits in the first half of this year, mainly due to low global demand.

Phuoc Hoa Rubber Joint Stock Company (HOSE:PHR), the largest listed rubber firm, earned VND120.735 billion ($5.8 million) in net profit, down 13 per cent on-year. The next biggest firms, Dong Phu Rubber Joint Stock Company (HOSE:DPR) and Thong Nhat Rubber Joint Stock Company (HOSE:TNC), saw their net profits more than halve to VND70.615 billion ($3.35 million) and VND11.262 billion ($52,000) respectively in the first half.

The Ministry of Agriculture and Rural Development estimated that Vietnam exported 548,000 tonnes of rubber valued at $989 million in the first eight months of this year, down 9.8 per cent in volume and 31.9 per cent in value on-year. The average rubber export price in the first seven months was $1,830 per tonne, down 24.96 per cent against the same period last year.

Difficulties are expected to persist for rubber firms, as there looks to be a surplus of 652,000 tonnes of rubber latex this year, reported London-based consultancy company Rubber Economic.

By By Huu Hoe-Phong Lan

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