More companies are expected to adhere to environmental standards, particularly in waste treatment, when the Law on Environmental Tax becomes effective on January 1.
This year companies have started to pay more attention to waste treatment, with expenses increasing by 10 times for some kinds of waste, according to Sai Gon Giai Phong (Liberated Sai Gon).
Under the new law, company expenses for environmental protection are expected to increase substantially.
Plastic bags will be among the seven most heavily taxed products, at 15-17 per cent, which means VND30,000-50,000 (US$1.4-2.4) per kilogramme.
This would affect both producers and consumers as there is no alternative material for plastic bag production, the newspaper reports.
The impact on companies and producers not dependent on plastic for production and packaging would be small, but for those who use plastic, challenges in productivity would occur, said Le Quang Lac Ha, deputy general director of Sai Gon Pure Water Company (Sapuwa).
The tax, coupled with high inflation, which has resulted in increasing prices of input materials, will place added pressure on producers and companies, said Nguyen Xuan Kinh, chairman of the executive board of the Central Pharmaceutical Products Company 25.
These companies would be forced to raise product prices, which would affect consumers, he added.
The impact would be especially negative if consumers have fewer alternatives for essential goods, where demand is higher than supply.
Le Van Khoa, director of the HCM City Waste Recycling Fund, said that taxation on environmentally unfriendly products was necessary and recommended environmentally compatible production methods.
“That would be a complete solution to the situation as it would bring in benefits to consumers,” he explained.
Investment in the manufacturing of green products, however, has not received proper attention, Khoa said.
High costs
Taxation on environmentally unfriendly products would lead to an increase in expenses for waste treatment, environmentalists have said.
The cost for treating hazardous waste would be especially high, according to environmental experts.
Since the beginning of the year, the cost for hazardous waste treatment has increased to VND2.5 million($120) to VND8 million ($380) per tonne, depending on categories. Next year, the prices are expected to be higher, VND12-40 million ($570-1,900) per tonne.
The tightening of regulations and management of environmental protection as part of the enforcement of the new law would also force companies to upgrade their equipment, especially wastewater and air treatment systems.
An official of the HCM City-based District 9 Paper Company told Sai Gon Giai Phong, on the condition of anonymity, that the company had to spend VND12 billion ($571,000) on completing its wastewater management system.
The expenses for maintaining the system were also a major challenge, the official said.
To deal with the authorities, a large number of companies have installed incomplete wastewater treatment systems, while stealthily discharging their wastewater into the environment.
The management of air pollution has been even worse, as 80 per cent of companies have no air treatment systems. The new law is expected to better control and minimise air pollution as companies must take more responsibility on environmental protection to survive and develop in a sustainable manner.
