Hyosung Vietnam Co., Ltd. has proposed the Ministry of Finance to increase import tax on two polypropylene (PP) plastic resins to 6% and 6.5%, local media reported, without specifying the HS codes of the resins. Responding to the proposals, Vietnam Plastics Association has requested the ministry to keep the import tax at the current rate of 3%.
The association said polypropylene (PP) demand from local manufacturers reached 1.85 million tons in 2020. While Vietnamese polypropylene (PP) producers can provide 850,000 tons/year of the resin at 100% capacity, some of them were exported. As a result, Vietnam imported 1.43 million tons of polypropylene (PP) last year. This year, polypropylene (PP) demand from Vietnamese companies is expected to reach 2.045 million tons.
Therefore, imposing a higher tax on polypropylene (PP) imports would increase Vietnam’s import bill. The association said importing polypropylene (PP) from the Middle East, Japan, Korea, and China would be more expensive. Meanwhile, suppliers based in ASEAN and other countries with free trade agreements with Vietnam are also expected to raise their selling prices to benefit from the higher tax rate. The association also warned that raising tax could drive up factory inflation and reduce the competitiveness of Vietnamese manufacturers.
