The Ministry of Finance has made a decision to exempt wood planks from export tax in a move to alleviate difficulties for producers and exporters.

Under Circular 81/2009/TT-BTC, exporters of wood planks no more than 100mm wide and 30mm thick will pay no tax as of April 27, down from 10 per cent currently.

The tax exemption is expected to help increase the export of planks and woodwork products, which has significantly reduced due to the global economic depression.

Deputy chairman of the Viet Nam Timber and Forest Product Association Nguyen Ton Quyen said the wood industry had total export turnover of about US$500 million during the first three months of this year, a year-on-year decrease of 22.9 per cent due to reduced orders from import partners.

The downturn has taken its toll on demands for woodworks in key export markets. For example, demands in the US and European markets have fallen 30 to 35 per cent this year.

Wood products in the past were among the country's key export staples. Turnover has remained high since 2000, with an average growth rate of roughly 25 per cent annually.

Last year, the country fetched $2.8 billion from wood product exports, which was 13.4 per cent higher than in 2007.

Forecasts for this year expect $3.2 billion in earnings from exports.

In a move to meet the target, trade officials have urged woodwork exporters to consider entry into new markets including Russia, India and Central Asian countries, rather than continuing with the current focus on the traditional markets of the US, the EU and Japan.

Source: VNS