The excise tax on fertilisers manufactured for export has been lifted under a decision issued by deputy minister of Finance Nguyen Hoang Anh Tuan on December 15.

The decision took immediate effect last Monday and applies to sulphate ammonia, potassium and diamonium phosphat fertilisers.

The move is aimed to ease the enormous surplus of fertiliser and to bring the prices of fertiliser exports more in line with world prices.

The Government applied an excise tax of VND4,000 or VND5,000 per kg of fertiliser in July to limit exports and stabilise the domestic market.

According to the Ministry of Agriculture and Rural Development, the price of fertiliser now fluctuates widely from place-to-place due to unpredictable factors, such as the number of middlemen through which it has passed.

Fertiliser is sold by manufacturers and importers to regional distributors who, in turn, sell it to district – and commune-level agents, confirmed Viet Nam Fertiliser Association vice chairman Nguyen Hac Thuy. Each agent can add VND10-20,00 per tonne to the cost.

Meanwhile, Government subsidies paid to domestic fertiliser manufacturers have artificially lowered domestic prices and destroyed any incentive to import more expensive fertilisers.

In past months, this has created a shortage on the domestic market, with domestic suppliers sometimes only able to meet about half of domestic demand. (VNS)