MoIT refuses to move polyester import tax

October 04, 2016 | 09:32

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The Ministry of Industry and Trade (MoIT) has refused Vietnam Textile and Apparel Association (Vitas)’s proposal to move the 2 per cent import tax to zero per cent on polyester synthetic fibre products.

Previously, according to PVTex Dinh Vu Joint Stock Company (PVTex)’s proposal, one of Vietnam’s largest polyester fibre and yarn producers, the Ministry of Finance (MoF) issued Circular 131/2015/TT-BTC dated August 27, 2015 changing the preferential import tax rate imposed on polyester synthetic staple fibres to 2 per cent.

However, according to Vitas, the 2 per cent can not help PVTex maintain its operations in the context of its recent financial problems.

Thereby, Vitas requested the MoIT to propose the MoF to move the preferential import tax rates imposed on polyester synthetic staple fibres.

However, the MoIT decided to maintain the preferential import tax rates until the end of this year. Representatives of the MoIT said that the interdisciplinary working group is still working on a resolution to PVTex’s difficulties and is building plans to resume the operation of the factory’s polyester synthetic fibre manufacturing line.

According to the latest movement, Vietnam's state-run oil and gas group PetroVietnam is seeking prime ministerial approval to sell its entire 74 per cent (or at least a 38 per cent) stake in PVTex, due to its recent string of losses.

PVTex started commercial operation in May 2014 with a capacity of 236 tonnes of polyester fibre and yarn per day, equalling 48 per cent of its designed capacity. However, the factory had to suspend operation numerous times due to unsold products piling up.