Vietnamese PE players react to new customs duty

Players in Vietnam are beginning to voice their reactions to the new customs duty of 5% for some PE grades, which was announced on November 16, 2017 to be effective as of January 1st, 2018.

Some players are doubtful about whether the new policy will be implemented or not, arguing that the economic conditions are not strong enough to support such a raise while the prevailing market levels are already high.

A converter said, “The hot topic in the market is the new customs duty to be implemented for some PE grades in 2018. However, there are some missing points at the documents and we don’t know how the market conditions will be when the implementation day will come. We are buying some cargoes in order to avoid the impacts of the tax; however, we keep them limited as we are not sure about how successful the new policy will be.”

Another converter commented, “We heard about the new policy about increasing customs duty for PE in Vietnam. We think the process needs to be monitored carefully as there are still some unclear points. The government had announced a tax increase for PP as well in the past few years; however, it was later cancelled and delayed. We think a similar case is likely for PE as the tax is slightly high and market conditions are not strong enough to support the policy.”

A third converter noted, “We don’t think the new customs duty will be workable in case of implementation as the tax rate is high. If the government put the tax into practice, local converters and factories will suffer and their chance to compete with foreign companies will become less.”