Vietnam’s paper industry is calling on authorities to ease regulatory hurdles affecting the domestic waste paper supply chain, warning that current tax and documentation requirements are driving up recycling costs and could hinder the country’s circular economy ambitions.
According to the Vietnam Paper and Pulp Association (VPPA), domestic paper production reached approximately 6.34 million tonnes in 2025, while consumption climbed to an estimated 7.77 million tonnes, marking a 10.8% year-on-year increase. Packaging paper accounted for more than 80% of total production, with demand expected to remain strong due to the rapid growth of e-commerce, logistics, exports, and the ongoing shift from plastic to paper-based packaging.
Vietnam’s paper industry recycles more than 3.5 million tonnes of waste paper annually, making recycled fiber a critical raw material while also reducing landfill waste, conserving natural resources, lowering greenhouse gas emissions, and supporting thousands of jobs across the collection and recycling network.
However, industry stakeholders say the domestic waste paper supply chain is highly fragmented, relying on a vast network of individual collectors, collection points, baling stations, traders, and recycling mills. A significant portion of recyclable paper is sourced from small-scale collectors who often operate informally, lack business registration, do not issue electronic invoices, and primarily conduct cash transactions.
This fragmented structure has created major compliance challenges for paper manufacturers, which are required to maintain extensive tax documentation despite handling thousands of small-value transactions throughout the collection chain.
Speaking at a recent VPPA meeting, a representative from HHP GLOBAL JSC, based in Hải Phòng, described raw material procurement as the industry’s biggest operational challenge. The company noted that waste paper typically passes through hundreds or even thousands of transactions before reaching collection stations, making it impractical to provide complete seller information, invoices, payment records, and supporting documents for every stage of the supply chain.
The concerns come as Vietnam updates its tax framework under the 2025 Law on Tax Administration, with implementing regulations taking effect on July 1, 2026. The revised rules govern tax obligations and invoice management for household and individual businesses based on revenue, business activity, and applicable tax calculation methods.
Industry representatives argue that the additional compliance burden ultimately raises transaction costs, making domestically sourced recycled paper more expensive.
Manufacturers have also highlighted differences in value-added tax (VAT) treatment between domestic and imported waste paper. Waste paper purchased from domestic suppliers operating under the direct VAT method generally does not allow buyers to claim separate VAT deductions, meaning the full payment is recorded as part of production costs. In contrast, imported waste paper may qualify for VAT deductions when businesses comply with VAT regulations and maintain the required import documentation.
The industry warns that this tax disparity could make imported waste paper more cost-competitive than locally collected material, potentially discouraging domestic recycling efforts and conflicting with the government’s broader objectives of promoting a circular economy, improving resource efficiency, and reducing carbon emissions.