VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
Liên Đoàn Thương Mại Và Công Nghiệp Việt Nam
Ben Thanh General Corporation and Sapa Group AB is the investor in Sapa Ben Thanh Shaped Aluminum Company Co., ltd (Ben Thanh Sapa Company), an enterprise that specialized in manufacturing and trading of shaped aluminum products.
Its business is to import 100% of alumina materials and then process and manufacture aluminum rods and Its business is to import 100% of alumina materials and then process and manufacture aluminum rods and shaped aluminum rods for consumption in the domestic market (accounting for 75-80% of total production) and foreign markets (about 20-25% of total output).
The main export market of the business is the North American market. As a member of AB Sapa Group, Ben Thanh Sapa Company has an opportunity to participate in the global supply chain, supplying accessories and components for industrial manufacturers such as Boeing, Airbus, Car Chevrolet, Tesla, Siemen, General Electric, etc. Export products of enterprises under heading 76.04 and subject to export duty at the rate of 0%.
Previously, we saw a great opportunity from the production and supply of high quality shaped aluminum for large industrial groups, and supported the strategy of expanding the domestic market. Ben Thanh Sapa Company developed more construction of a new factory in Binh Duong Province to increase the current production capacity, contribution to creation of jobs for workers in the region and increasing the contribution to the state budget.
However, after Decree No. 122/2016 / ND-CP dated September 1, 2016 on export tariffs, preferential import tariffs, list of goods and absolute tax rates, mixed taxes, import tariffs that excluded in the valid tariff quotas, the export tax rate on export products of Ben Thanh Sapa Company has increased from 0% to 7%. The increasing the export tax rate directly affects the price of the products, and reducing competition with competitors from other countries. The risk of losing export markets, and the opportunity for deeper engagement in global industrial supply chains, has occurred. In the first 6 months of 2017, the total export volume of enterprises has decreased sharply, only remain 10% of total output, compared with 25% in the past. Ben Thanh Sapa Company is considering to continue or terminate the expansion of its factory in Binh Duong Province, due to the impact of the current tariff increase.
To consider that the operation of Ben Thanh Sapa Company is to import 100% of aluminum foil to produce shaped aluminum bars, so there is no negative impact on the environment due to the use or production of alumina foil that has origin in the country. . In addition, the company is orienting its production of high quality aluminum products, increasing the technical and technological content to meet the complex requirements of the world's industrial and technological groups. . The operation of this enterprise belongs to supporting industry group which is encouraged to invest in development. The overall benefit from the 7% export tax increase is lower than the benefit from the application of a zero-duty export tax on processed aluminum products processed from imported raw materials. As an investor in Sapa Ben Thanh Company proposes to the Economic Commission for the National Assembly, the Government’s Office, the Ministry of Finance, the General Department of Customs, the Vietnam Chamber of Commerce and Industry. To review the export tax policy on shaped aluminum like the case of Sapa Ben Thanh Company, to creat favorable conditions for production and business activities of enterprises while still ensure the overall benefits.
