New tax on plastic bags sends prices soaring

Prices of plastic bags have rocketed since the Environmental Protection Tax Law came into effect this month, slapping steep taxes on them.

From 2012 January 01 a kilogram of plastic bags attracts a tax of up to VND50,000, as the government seeks to reduce their use by supermarkets and shopping centres by 40% by 2015.

This is causing difficulties for small traders who consume the majority of plastic bags. Pham Thi Thu Hong, who has a fruit shop in Long Bien, Ha Noi, wholesale market said with a kilogram of small plastic bags now costing VND70,000, up from VND43,000 earlier, she intended to raise the price of fruits to cover the costs.

Truong Phat, a stall holder in Binh Tay market in HCMC District 6, said the wholesale price of plastic bags has almost doubled to VND65,000-70,000 a kilogram now.

Notwithstanding the higher prices, sales of the bags remain high. Hung, a plastic bag wholesaler in Ha Noi's Hai Ba Trung District, said since it is not easy to change consumers' old ways, small traders need to use them despite higher prices.

Can Tho small traders have even stocked up on the bags fearing their prices would increase further, sending their sales rising by more than 50% month-on-month. Dang Thi Thu An, a trader in Hue's Dong Ba Market, on the Citadel side, said she has no choice except to keep buying the bags because she cannot sell her goods without them.

A Can Tho fruit shop owner said: "I sell around 700 coconuts a day, so I need 2 kilograms of plastic bags to wrap them. With the increase in prices, my profits have fallen significantly."