The Vietnam Timber and Forest Products Association (VIFOREST) has officially proposed that the Ministry of Finance remove the value-added tax (VAT) on semi-processed wood products, classifying them as agricultural goods exempt from VAT.
The proposal aims to reduce procedural burdens, financing costs, and legal risks for exporters — issues that have been weighing heavily on one of Vietnam’s most competitive export sectors.
Why the Change Is Needed
Over the past 20 years, Vietnam’s forestry sector has achieved remarkable results: 🌳 Over 4.6 million hectares of plantation forest 🌳 Domestic timber supply meeting 75–80% of processing demand 🌳 Projected wood and furniture export value of USD 16.9 billion in 2025
However, the industry’s growth is being slowed by delays in VAT refund processing, leaving many exporters struggling to maintain cash flow.
Even legally compliant companies with complete documentation often face months-long refund delays — a serious challenge when profit margins in the wood industry average only 5–7%.
Exporters must also prepay 10% VAT on input materials, locking up capital while waiting for refunds. For small and medium-sized manufacturers, this slows down reinvestment, production cycles, and even on-time delivery for international clients.
As VIFOREST notes, removing VAT from semi-processed wood products would not only ease cash flow pressure but also reduce the risk of invoice fraud, enhance transparency, and increase Vietnam’s international competitiveness.
Challenges in Traceability
Another complexity lies in wood traceability. Current rules require verification down to individual forest households, while a single export shipment may source from dozens of growers across multiple provinces. This administrative workload adds time and cost that small exporters can ill afford.
A Step Toward a Stronger, Fairer Industry
At Misamex Furniture, we welcome policy discussions like this. As an OEM/ODM exporter serving clients worldwide, we understand how cash flow, compliance, and speed affect every part of the export chain.
Simplifying tax procedures and streamlining refunds would allow more manufacturers — especially small and medium-sized ones — to focus on what they do best: designing, producing, and delivering quality Vietnamese furniture to the world.
“A space that fits – A heart that’s full.” That’s not only our motto at Misamex — it’s a reflection of how we believe Vietnam’s wood industry can continue to grow with both strength and integrity.
📩 Learn more about Misamex’s export solutions at:
🌐 www.misamex.vn | ✉️ xnyder@misamex.vn | 📞 (+84) 902 944 134
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