Quality seafood left stranded due to inconsistencies: VASEP
In Vietnam, the seafood industry is grappling with a series of regulatory inconsistencies that are causing headaches for businesses and limiting the availability of high-quality seafood for consumers. These issues have been categorised into three main groups: conflicting or overlapping regulations, high compliance costs and restrictions on innovation, and vague, impractical, or unreasonable provisions.
One of the most pressing issues is the legal vacuum surrounding minimum required performance limits (MRPL) for equipment used to detect banned antibiotics in seafood. This regulatory void has led to a situation where seafood products that meet stringent EU standards for export cannot be sold within Vietnam. The Association of Seafood Exporters and Producers (VASEP) has submitted a report to Deputy Minister of Justice Nguyễn Thanh Tú regarding this issue, highlighting it as the most pressing concern.
Another problem lies with the value-added tax (VAT) regulations for seafood by-products. Unprocessed or lightly processed by-products are currently exempt from VAT declarations, while by-products from processed items like boiled shrimp heads are subject to a 10% VAT rate. This inconsistency results in businesses needing to allocate extra resources to separate and invoice the same types of by-products based on their production source, leading to conflicts with clients who are unwilling to accept two different tax rates for the same product.
VASEP has called for unified guidance from the Ministry of Finance regarding VAT exemptions for all seafood by-products. They propose a VAT exemption for seafood by-products that have undergone minimal preparation but have not been processed into other products. This proposed exemption aligns with Circular 83/2014/TT-BTC, which classifies items like shrimp heads, shrimp shells, fish heads, and fish bones as unprocessed or minimally processed goods, exempting them from VAT during commercial transactions.
Other regulatory inconsistencies include a rule prohibiting mixing imported and domestic seafood in the same export shipment, but it lacks clear definition or justification in the context of global norms. There is also a regulatory gap regarding clear rules on changing a product's intended use, leaving businesses without direction on shifting imported seafood from export-oriented processing to domestic consumption, or vice versa.
These regulatory inconsistencies not only affect the domestic market but also the export-oriented seafood industry. Despite meeting EU standards, products cannot be sold in Vietnam due to the regulatory void. This situation affects the export-oriented seafood industry as well, as products that could be sold in Vietnam are instead restricted to export markets or left unsold.
To address these issues, VASEP has proposed unified guidelines for handling seafood by-products and clearer regulations on antibiotic testing to align with international standards. The organisation hopes that these changes will streamline operations, reduce costs, and promote innovation in the seafood industry, ultimately benefiting both businesses and consumers.
- The legal void surrounding minimum required performance limits (MRPL) for antibiotics detection in seafood is causing public organizations like VASEP to submit reports to the Deputy Minister of Justice Nguyễn Thanh Tú, emphasizing it as a pressing concern for the industry.
- The inconsistent value-added tax (VAT) regulations for seafood by-products in Vietnam are leading to conflicts among businesses and their clients, as unprocessed or lightly processed by-products are exempt from VAT declarations, while the same types of by-products from processed items are subject to a 10% VAT rate.
- VASEP has proposed unified guidance from the Ministry of Finance for VAT exemptions on all seafood by-products that have undergone minimal preparation, citing Circular 83/2014/TT-BTC as a guide, which exempts unprocessed or minimally processed goods like shrimp heads, shrimp shells, fish heads, and fish bones.
- Regulatory inconsistencies, such as the rule prohibiting the mixing of imported and domestic seafood in the same export shipment, without clear definition or justification in global norms, as well as gaps in regulations regarding changing a product's intended use, are impacting both the domestic and the export-oriented seafood industry, limiting the availability of high-quality seafood for consumers and affecting the competitiveness in international markets.
