Vietnam’s New VAT Law Takes Effect, Potentially Impacting Coffee Prices and Export Trade
According to Coffee Finance News, starting July 1, 2025, Vietnam’s newly effective Value-Added Tax (VAT) law requires certain basic agricultural products—previously exempt from VAT—such as coffee, rice, and seafood, to now be subject to a 5% tax rate. The Vietnam Food Association stated that this shift has tied up a significant portion of exporters’ working capital due to pending VAT refunds, slowing their ability to purchase basic agricultural products from farmers and affecting domestic prices. The Vietnam Chamber of Commerce and Industry (VCCI) also noted that while the new VAT law is expected to bring groundbreaking reforms, it has in practice created new obstacles that must be addressed to promote the development of agriculture, forestry, and fisheries. In the coffee sector, exporters of coffee and tea have expressed concerns over the unclear definition of what constitutes “preliminary processing.” The Vietnam Coffee and Cocoa Association pointed out that unprocessed coffe...