Vietnam Considers Imposing 5% VAT on Fertilizers to Boost Domestic Competitiveness

• The Ministry of Finance in Vietnam has proposed a 5% value-added tax (VAT) for fertilizers.
• Currently, fertilizers are tax-exempt, which has impacted production costs and profitability.
• The proposed tax adjustment aims to make domestic fertilizer production more competitive against imported alternatives.
• Foreign fertilizer sellers can recover their input VAT, potentially offering lower prices and gaining a competitive advantage.
• The Government may miss out on VAT revenue at the import stage.
• Domestic fertilizer manufacturers and the Ministry of Industry and Trade recommend reclassifying fertilizers into the 5% VAT category.
• Many countries adopt favorable tax policies for fertilizers, recognizing their importance in agricultural production.
• If approved, buyers of fertilizers would have to pay a 5% VAT, but market-driven pricing adjustments could benefit consumers.

Source: vietnamnet.vn

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---