Vietnam plans to raise import tax on PSF from zero to 2pc

The Vietnam domestic fibre manufacturers have been facing harsh competition from imported fibre. The Ministry of Industry with the aim to rescue and encourage domestic production has plans to increase import tax on polyester staple fibre (PSF) from zero to 2 percent.

The Ministry plans to raise tax on staple fibre, coded 55.01, 55.02, 55.03, 55.04, 55.06 and 55.07, which are currently enjoying a zero tax rate.

According to the Ministry of Industry and Trade, Viet Nam imports around 150,000 tonnes of polyester fibre every year, while domestic producers do not run at full capacity.

One of the leading producers, PetroVietnam Petrochemical and Textile Fiber Joint Stock Company (PVTEX), runs only 50 percent of its design capacity due to difficulties in selling owing to competition from imported products.

With plunging oil prices, the global price of the PSF has declined sharply, forcing the PVTEX to lower the price of its fibre from US$1,340 per tonne in August 2014 to $970. However, this has not improved its chance against importers. The current price cannot make up for production costs.

According to the ministry, to enhance the competitiveness of Vietnam’s garment and textile industry, the country has been carrying out negotiations to join the Trans-Pacific Partnership, which requires a yarn-forward rule of origin for textiles and apparel.

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