VASEP complains on tariffs for semi-processed/processed seafood

Vietnam Association of Seafood Exporters and Producers (VASEP) recently voiced their unhappiness over the imposition of tariffs by Vietnamese tax authorities’ on Vietnamese enterprises in the seafood business.
This refers to tariffs on semi-processed seafood products at 20%, while their products for exports or domestic consumption that are mainly processed, have been subjected to a lower tariff of 15%, in line with the Finance Ministry’ Circular 96.
To boost the performance of the seafood industry and help firms reduce production costs while enhancing competitiveness in the global market, the Ministry of Agriculture and Rural Development had written to the Ministry of Finance in July to attend to VASEP’s complaint and find a solution beneficial to the industry.
Presently, the firms are processing fresh seafood into cooked products and seafood material mixed with spices into value-added products. However, while inspecting the seafood processing firms, the tax agencies identified their products as semi-processed instead of processed seafood products, and therefore, they had to pay higher tariffs.
The VASEP noted that the authorities’ guidelines do not include specific definition of processed and semi-processed products. At the same time, tax agencies impose taxes on processed and semi-processed products based on tax regulations.
Specifically, Clause 1 of Article 1 in Circular 26 of the Ministry of Finance regulates that unprocessed or semi-processed products comprise those which are cleaned, dried, cut, sliced, peeled, husked, packaged and preserved in cold storage facilities. Clause 3 of Article 4 of the ministry’ Circular 83 also stipulates that the rest are identified as processed products.
Given the articles and circulars, many firms stated that the regulations on taxes do not match the growth of the seafood processing industry, the Law on Food Safety and the Prime Minister’s Decision 27. As such, food processed via the freezing method is not regarded as a processed product.
Apart from this, the 2010 Law on Food Safety regulates that processing food is the process of turning semi-processed products or fresh materials into food products.
As such, the bottlenecks have caused severe losses for seafood processors and hindered their development, according to the VASEP. The association proposed identifying products, which are processed from frozen seafood, fresh seafood and materials mixed with spices as under processed seafood category.