PM backs VAT exemption for animal feed
PM backs VAT exemption for animal feed
The Prime Minister is supporting the proposal of the Ministry of Finance to include animal feed in the list of products exempted from value added tax (VAT) payment.
The Prime Minister told the ministry to submit for review and approval the proposal at the Eighth Session of the 13th National Assembly due late this year.
A five per cent VAT rate is currently being imposed on animal feed. The proposed exemption aims to stabilise the price of feed in the domestic market and benefit the farmers, who have had to deal with diseases, declining consumption and other difficulties in breeding farm animals in recent years.
The farmers' situation further worsened following the increase in feed prices last year. The Department of Livestock Production attributed the increase to the country's dependence on imported raw materials for production and foreign producers' domination of the industry.
Figures from the Ministry of Agriculture and Rural Development showed that Viet Nam has 58 animal feed producers with more than 200 feed production plants. Foreign animal feed producers make up one-third of the total and account for around 65 to 70 per cent of the market.
According to Nguyen Dang Vang, President of the Viet Nam Husbandry Association, a VAT exemption for animal feeds is good news for farmers, who expect the price of animal feed to fall.
To further boost breeding and aquaculture and ensure that Government support reaches the farmers, the Ministry of Finance has been asked to help the Ministry of Agriculture and Rural Development and other concerned authorities in tightening management of the pricing of imported and locally-produced animal feed, as well as quality standards for and measures to protect local animal feed production.
Regarding tax policies on agricultural inputs such as fertilisers, pesticides and veterinary medicine, the Prime Minister ordered concerned ministries to formulate policies that conform with the Government's agricultural development and taxation system reform strategies for 2011-20.
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