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Vietnam considers fivefold gallop in plastic bag tax

Vietnam considers fivefold gallop in plastic bag tax

Thursday, September 28, 2017, 11:18 GMT+7

Vietnam’s Ministry of Finance is weighing an amendment to its environmental protection laws that would call for a 400 percent rise in its plastic bag tax, worrying locals who say plastic bags are essential to their businesses.

The VND40,000 ($1.76) per kilogram tax on plastic bags was imposed in January 2012. 

The amendment says the number should skyrocket to VND200,000 ($8.81) a kg, Lao Dong (Labor) newspaper reported on September 19.

The new rate would mean every bag carries an average tax of VND2,000 ($.09).

To put this in perspective, the UK presently applies a tax rate of 15 cents, or VND4,500, per bag, while Hong Kong’s plastic bag tax sits at a meager $.05, or VND1,050 per bag, according to the Hanoi-based newspaper.

Even at the VND40,000 a kg tax, plastic bags are still heavily used across Vietnam, from traditional markets and grocery stores to supermarkets and shopping malls.

The low cost of bags means stores are typically able to provide consumers with additional, free of charge bags.

Campaigns calling on consumers to bring their own bags while shopping seem to have brought little change to local habits. 

Likewise, initiatives aimed at promoting the use of eco-friendly bags in place of plastic bags have fallen on deaf ears.

While the finance ministry has yet to offer more information on the proposed tax increase, local traders, businesses, and fishermen who need plastic bags to conserve their catches are concerned about the tax’s effect on their bottom lines.

However, Huynh Thi My, general secretary of the Vietnam Plastics Association, told Tuoi Tre (Youth) newspaper on Wednesday that the association has not been asked for feedback on the proposed tax increase.

Tran Viet Anh, general director of Nam Thai Son Co., an export-import company, says there are some 30 plastic bag makers in Vietnam whose products are certificated as environmentally friendly.

These businesses will not be affected by the environment tax, he said.

“Plastic bags subject to the tax are manufactured by small businesses, some of which rarely issue receipts for their transactions, so it is not easy to collect their taxes,” Anh added.

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