Under the current tax regime, fertilizers are categorized as non-taxable, which means businesses in this sector cannot declare or offset input VAT. Foreign fertilizer sellers can recover their input VAT, potentially allowing them to offer lower selling prices and gain a competitive advantage. Meanwhile, the Government may miss out on VAT revenue at the import stage, where import taxes are generally low or even zero. Both domestic fertilizer manufacturers and the Ministry of Industry and Trade have jointly recommended reclassifying fertilizers into the 5% VAT category. Fertilizers in Thailand, Laos, Myanmar, the Philippines, Pakistan, and the United States are exempt from VAT.
