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2023: Environmental tax on foam box?

The Vietnam Ministry of Finance proposed to add "foam plastic boxes for packaging and containing food" to the list of items subject to environmental protection tax.

One noticeable result of the review of the current Environmental law is that the identification of taxable plastic bags is causing problems as the Law on Environmental Protection Tax stipulates that the concept and name of plastic bags that cause environmental pollution are not consistent with the law on environmental protection. On the other hand, according to the provisions of Clause 3, Article 64 of Decree No. 08/2022/ND-CP, non-biodegradable plastic packaging includes non-biodegradable plastic bags and styrofoam plastic boxes for packaging and containing food. The current Environmental Protection Tax Law stipulates tax on plastic bags, but does not stipulate tax on styrofoam packaging and food containers.

According to the Ministry of Finance, currently foam plastic packaging products, food containers, collectively called foam plastic boxes, are being used very widely. This type of item is favoured by food processing facilities, restaurants, and catering businesses because of its convenience, light weight and low price. For example, the price of each type of foam box (containing sticky rice, rice, dumplings, etc.) will vary from 120,000VND (about $5.5) to 230,000VND (about $10) per carton (box of 600 pieces), and depending on the number of customers, the price could be much cheaper, which means on average the price is about 290VND (about $0.012) per piece. Meanwhile, the price for a sustainable alternative, for example, sugarcane box, is significantly higher, at about 3,000 VND (about $0.13) per piece.

The use of foam plastic containers for food is warned that there are many risks of health and environmental damage. Like plastic bags, foam plastic products are difficult to decompose and often take a long time to decompose in the environment, usually about 400 to 1,000 years. Although the government has implemented many solutions to limit the use of styrofoam plastic boxes, due to the low cost, and the fact that the habit of using and disposing of domestic waste of Vietnamese people is still relatively low and out of control, the situation of using and discharging foam plastic boxes is still uncontrollable.

In order to (1) comply with the law on environmental protection and ensure the restriction of production and use of products and goods that cause environmental pollution when used, at the same time, to (2) ensure to cover all cases arising in reality, ensure fairness, in accordance with the principles of collection of environmental protection tax on goods that cause environmental pollution when used regardless of the purpose of use, to (3) be suitable with the goal of reforming the environmental protection tax policy towards expanding the taxable objects in the Tax System Reform Strategy to 2030, and finally to (4) contribute to increasing state budget revenue, the Ministry of Finance proposed to add "foam plastic boxes for packaging, containing food containers" to be subject to environmental protection tax and use the general phrase "non-biodegradable plastic packaging" instead of "taxable plastic bags" to cover taxable objects including plastic bags that are difficult to distinguish biodegradable, styrofoam packaging and food containers (removing the name and concept of plastic bags subject to environmental protection tax).

Therefore, in order to ensure sufficient scientific and practical basis when proposing to add objects subject to environmental protection tax, the Ministry of Finance will coordinate with the Ministry of Natural Resources and Environment and other relevant ministries and agencies to continuously continuously review and assess the level of environmental pollution of products and goods that cause environmental pollution when used, thereby proposing the addition of products and goods to the subjects of environmental protection tax and proposing the specific environmental protection tax framework and rates for products and goods will be proposed to be supplemented accordingly when making a request for the formulation of the draft Law on Environmental Protection Tax (amended).



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