Four associations in the livestock industry have just sent a petition to Prime Minister Pham Minh Chinh and National Assembly Chairman Vuong Dinh Hue to remove regulations on conformity declaration for animal feed and veterinary medicine; apply uniformly the exemption of value-added tax on livestock products in the form of preliminary processing and preservation; and strictly control the import of livestock products.
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| It is necessary to strengthen quarantine measures, quality control and quantity control at border gates allowed to import live animals into Vietnam. |
Faced with many challenges and difficulties in domestic livestock production and trade, on March 12, 2024, the Vietnam Livestock Association, the Vietnam Animal Feed Association, the Vietnam Large Livestock Association, and the Vietnam Poultry Association sent a petition to Prime Minister Pham Minh Chinh and National Assembly Chairman Vuong Dinh Hue on three issues: Abolishing regulations on conformity declaration for animal feed and veterinary drugs; uniformly applying the exemption of value-added tax on livestock products in the form of preliminary processing and preservation; strictly controlling the import of livestock products.
Eliminate regulations on conformity declaration for animal feed and veterinary medicine products
According to the associations, the management of animal feed (TACN) and veterinary drugs according to technical regulations (QCKT) is necessary to ensure food safety for humans and animal health. However, QCKT of these groups of products should only be technical regulations that producers and traders must comply with and be the basis for management agencies to inspect and handle violations, as many countries are applying and as well as the field of food safety management in Circular No. 24/2013/TT-BYT of the Ministry of Health (stipulating the maximum allowable limit of veterinary drug residues in food products).
The current application of the form of conformity declaration for animal feed and veterinary drugs is only a formality, not effective in management, but causes a lot of costs and time for people and businesses.
Meanwhile, the cost of assessing the conformity declaration for animal feed and veterinary medicine products is very expensive. The cost of sample analysis and testing alone is very large, specifically, for animal feed or veterinary medicine, it ranges from 2 - 4 million VND/product and from 10 - 20 million VND/vaccine product for the recognition assessment and also takes samples for testing in the maintenance assessment, re-assessment at the end of the product cycle of 3 years.
If calculated for a business with hundreds of products and the entire livestock and veterinary industry with thousands of production facilities, this cost has reached hundreds of billions of VND, not to mention the loss of time and seriousness of people and businesses in law enforcement.
Proposal to not charge value added tax
Four associations recommend that the Government and the National Assembly amend this content in the Law on Value Added Tax. While waiting for the Law to be amended, this provision should be temporarily suspended for livestock products, because according to Clause 1, Article 1 of the Law on Value Added Tax amended in 2016, the subjects not subject to tax are: Crop, livestock, aquaculture products, and fishing products that have not been processed into other products or have only undergone normal preliminary processing by organizations and individuals that produce, catch, and sell them and at the import stage. Enterprises and cooperatives that buy and sell livestock, aquaculture, and fishing products that have not been processed into other products or have only undergone normal preliminary processing and sell them to other enterprises and cooperatives are not required to declare and pay value added tax, but are entitled to deduct input value added tax.
According to this regulation, livestock products such as cleaned and packaged poultry eggs; slaughtered, cooled, frozen poultry meat, etc., if bought and sold by enterprises and cooperatives, are exempt from 5% value added tax, but if enterprises and cooperatives produce and sell these products to people and individual business households, they must pay 5% tax. This regulation is causing many difficulties for the consumption of domestically produced livestock products.
The reason is that in Vietnam, most unprocessed livestock products are consumed by individual businesses and in traditional markets. Therefore, if livestock products that have been pre-processed and industrially slaughtered incur more costs than those that are manually slaughtered (a problem that is causing too many risks regarding diseases, food safety and the environment) and have to add 5% value added tax, they will not be able to compete with livestock products that are "floating without quality control, safety, and tax" and with imported livestock products of the same type, such as frozen meat and whole chickens that are not subject to value added tax at the import stage.
Currently, in the livestock production chain of our country, the weakest link is slaughtering and processing. This issue has been encouraged by the government with many policies and guidelines to develop in a concentrated, industrial direction, but so far it has not been successful.
The main reason for these problems is that we have not been able to control manual slaughtering activities in terms of production and business conditions and tax policies, while the 5% value added tax on pre-processed livestock products is an obstacle to this activity of enterprises and cooperatives, while the State does not collect much from this tax stream.
Strengthen inspection and strict control of imported livestock products.
It can be said that, compared to countries with developed livestock industries, our country's regulations on importing livestock products are not strict and still have many loopholes. Meanwhile, to export poultry meat and eggs, we have to endure many strict technical barriers in importing countries, making our livestock products weak and disadvantaged right at home.
According to statistics, in 2023, the import turnover of livestock products was 3.53 billion USD, while the export turnover was only 515,000 USD. In addition to the above official import figures, there is also a very large volume of livestock and livestock products imported illegally (smuggled). According to the reflection of authorities and the media, in 2023 and the first weeks of 2024, every day there are 6,000 - 8,000 pigs (weighing 100 - 120 kg/head) smuggled into Vietnam, not to mention a large amount of buffalo, cows, discarded chickens, breeding chickens, etc.
The massive import of livestock products into our country is currently a serious problem, causing many risks and consequences.
The Associations respectfully request the Prime Minister to direct the National Steering Committee for Prevention of Smuggling, Trade Fraud and Counterfeit Goods and the Ministries of Agriculture and Rural Development, Industry and Trade, Science and Technology, Public Security and the Army to strengthen measures to inspect and strictly control the import of livestock products.
For official imports, urgently build technical barriers and trade policies to minimize official imports of livestock products.
Among them, there is the issue of strengthening quarantine measures, quality control and minimizing the number of border gates allowed to import live animals into Vietnam, as experienced by countries around the world, typically the US, China, Thailand, Japan, Korea... they have done very effectively.
For informal imports, all forms of import and use of imported livestock and livestock products are prohibited, because our domestic livestock products have basically met domestic consumption needs. In addition, Vietnam has a long border, and the surrounding countries do not have good veterinary work and disease control.
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