A collective proposal to remove the 5% VAT on rice and coffee due to concerns about capital being tied up.

After the enactment of Decree No. 48/2024/ND-CP and the accompanying guidance documents, Vietnam's two strategic agricultural sectors, rice and coffee, have collectively submitted proposals to the Prime Minister. Specifically, the Vietnam Food Association (VFA) and the Vietnam Coffee-Cocoa Association (VICOFA) both believe that the imposition of a 5% VAT on rice and coffee from July 1, 2025, will create capital pressure, increase risk, and burden procedures, causing enterprises to worry about the competitiveness of Vietnam's agricultural products being affected. Capital burden, risk of waiting for tax refunds The biggest bottleneck that businesses point out is financial pressure. The Vietnam Food Association (VFA) analyzed that businesses must pay a 5% VAT at the commercial stage, but credit organizations do not disburse funds for this tax when providing working capital. This directly increases production costs and reduces business efficiency. For the coffee industry, when the ...