2023: Proposal for environmental protection tax on foam boxes in Vietnam

According to the Ministry of Finance, currently foam plastic packaging products, food containers, collectively called foam plastic boxes, are being used widely. They are very common among food processing facilities, restaurants, and catering businesses because of their convenience, light weight and low price. For example, the price of foam box (for example, the size for common Vietnamese street food like sticky rice, rice, dumplings, etc.) varies from 120,000VND (about $5.5) to 230,000VND (about $10) per carton (box of 600 pieces), and could be much cheaper when buy in bulk. On average the price is about 290VND (about $0.012) per piece. Meanwhile, the price for a sustainable alternative, for example, sugarcane box, could be significantly higher, at about 3,000 VND (about $0.13) per piece.

The use of foam plastic containers for food raise multiple risks of health and environmental damage. Similar to plastic bags, foam plastic products are difficult to decompose and often take a long time to decompose in the environment, 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 is still relatively low, the situation of using and discharging foam plastic boxes is still uncontrollable.

photo: VTV

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, 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 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.

The general phrase “non-biodegradable plastic packaging” would replace “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).