Vietnam Textile and Garment Corporation (Vinatex) has petitioned the federal government for a five per cent cut in value added tax (VAT) imposed on fibre and knitwear products.

According to Vinatex, lowering the VAT rate from 10 per cent to five per cent would help relevant producers boost competitiveness due to the effect of high input material prices on productivity and business efficiency.

The group argued that such a move would place local producers in line with those from ASEAN countries, who will enjoy a tax rate of five per cent by 2005 under the ASEAN Free Trade Area roadmap.