Designing a Value-Added Tax-integrated recovery scheme for Abandoned, Lost or Discarded Fishing Gear: Science–policy integration and decision-support for Vietnam’s fisheries

Designing a Value-Added Tax-integrated recovery scheme for Abandoned, Lost or Discarded Fishing Gear: Science–policy integration and decision-support for Vietnam’s fisheries | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Designing a Value-Added Tax-integrated recovery scheme for Abandoned, Lost or Discarded Fishing Gear: Science–policy integration and decision-support for Vietnam’s fisheries Thomas Potempa, Hung Quoc Pham, Max Ehleben This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8329512/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Abandoned, lost, or otherwise discarded fishing gear (ALDFG) is a critical source of marine plastic pollution in Vietnam, yet formal recovery participation remains low due to weakly aligned incentives and logistical frictions. We design and evaluate a VAT-linked circular economy instrument that refunds the 5% VAT on new gear for each kilogram of ALDFG returned and verified at ports, while allowing fishers to retain on-site resale proceeds to informal buyers. Drawing on a face-to-face survey of 1,525 fishers across three coastal provinces, behavioural evidence on tax salience, and regulatory analysis of Vietnam’s VAT framework, we quantify the combined incentive at 14,500–16,500 VND/kg (≈ 8–10% of new gear price). The scheme integrates port mass verification and receipts with VAT documentation, achieves low estimated administrative cost (≤ 0.5% of incentive value), and aligns with informal market practices already used by more than 89% of fishers. Modelling indicates that, under clear communication, participation can rise substantially from current formal return rates, delivering a several-fold increase in verified returns without requiring new bureaucracy. The approach is administratively feasible (requiring a modest legal amendment to extend VAT refund eligibility to ALDFG returns), politically practical, and transferable to comparable fisheries and plastic-intensive sectors. We present an implementation roadmap and governance safeguards (receipt reconciliation, price-variation monitoring, recycling-market stability) to support near-term adoption. ALDFG value-added tax (VAT) refund informal recycling markets behavioural salience administrative feasibility Vietnam fisheries governance Figures Figure 1 1 Introduction Abandoned, lost, or otherwise discarded fishing gear (ALDFG) presents a critical and persistent source of marine plastic pollution in Vietnam, where small-scale coastal fisheries remain central to local livelihoods. With over 1.5 million registered fishers and nearly 77,000 vessels (Preprint: Tri et al., 2025 ), Vietnam's fishing industry is especially vulnerable to gear loss. Recent studies estimate that 9–13% of all fishing gear in use is lost or abandoned each year (Ngoc et al., 2025 ; Bui et al., 2022 ). This not only worsens "ghost fishing" and marine ecosystem degradation, but also accelerates microplastic formation, with cascading negative effects on fisheries productivity and coastal health (Richardson et al., 2022 ), and broader ecosystem services and welfare (Kumar et al., 2013 ; Dasgupta, 2001 ). Despite the urgency of the problem, current ALDFG management in Vietnam remains largely linear—treating lost gear as unrecoverable waste instead of a recyclable resource (Kirchherr et al., 2017 ). This gap stands in contrast to the ambitions of Vietnam's Circular Economy Strategy, which calls for a 20% increase in resource productivity and at least a 15% reduction in raw material consumption in key sectors—specifically including fisheries—by 2030 (King et al., 2020 ). This also aligns with broader circular economy framing and recent Vietnamese policy reviews and action plans (Geissdoerfer et al., 2017 ; Dang et al., 2020 ; Government of the Socialist Republic of Vietnam, 2019; Government of the Socialist Republic of Vietnam, 2025). A key insight from our REVFIN survey of over 1,500 Vietnamese fishers is that almost 90% already participate in informal recycling markets, preferring to exchange or sell end-of-life fishing gear for material value (“for change”), usually to retail buyers or scrap collection centres. The prevailing market price for used nets is 6,000–8,000 VND/kg, providing a real, though modest, economic incentive to recover and return ALDFG. However, this incentive alone is insufficient to achieve the desired recovery rates, as logistical barriers and recurring costs such as transport limit the attractiveness of voluntary returns. Recent developments in fiscal policy offer new opportunities to strengthen circular economy incentives: fishing gear in Vietnam is subject to a 5% VAT, matching agricultural goods and lower than the standard rate. Under the policy design proposed here, fishers who turn in ALDFG receive not only this full 5% VAT refund on new gear (worth 8,500 VND/kg based on typical prices, assuming 170,000 VND/kg for new gear), but also retain the full sale value of their recovered materials. This combined incentive—VAT credit plus market proceeds—raises the total financial benefit for participation substantially (often to 8–10% of new gear cost), and directly addresses one of the top barriers identified in the literature: inadequate or weakly aligned recovery incentives (Gilman et al., 2022 ; Ngoc et al., 2025 ). This is further reinforced by behavioural results from Trinh ( 2025 ), who showed that well-communicated, even modest VAT reductions can trigger strong participation responses, especially among liquidity-constrained fishers. This paper closes the policy-action gap by presenting an integrative, market-based circular economy design for ALDFG management in Vietnam. We show how leveraging existing VAT infrastructure—together with informal market practices already widespread among Vietnamese fishers—can multiply recovery rates and unlock material value, aligning ecological goals with real-world behaviour. 2 Literature Review Marine litter from abandoned, lost, or otherwise discarded fishing gear (ALDFG) is now widely recognized as a critical threat to ocean health and fisheries sustainability worldwide (Giskes et al., 2022 ; FAO, 2023 ). Vietnam, with its large small-scale fisheries sector and dense coastal population, faces a disproportionately high rate of ALDFG losses—estimated at 9–13% of fishing gear per year (Ngoc et al., 2025 ; Bui et al., 2022 ). ALDFG not only contributes to "ghost fishing" and habitat destruction (Richardson et al., 2022 ), but also undermines material efficiency and hinders progress towards the country’s circular economy goals (King et al., 2020 ). 2.1 Limitations of Current ALDFG Management Existing ALDFG management in Vietnam and comparable regions is primarily linear, focused on waste removal, incineration, or landfill rather than recovery and circular re-use (Kirchherr et al., 2017 ), despite the availability of gear-specific recycling options and guidance (Sala & Richardson, 2023 ; Liotta et al., 2024 ). Common approaches include port collection systems and gear "buy-back" programmes. For example, Norway’s Fishing Gear Recovery Programme offers a 20% buy-back premium on gear value, but faces high administrative costs (30–40% of its budget) and engages only a quarter of fishers (Havas et al., 2022 ). In Southeast Asia, such schemes fare even worse: in Vietnam, buy-back programmes achieve just 15–20% participation, mainly due to funding constraints and a lack of alignment with informal market practices (Bui et al., 2022 ). Port-based incentives fail for similar reasons, reaching only about 4.6% of Vietnamese fishers, mostly because of insufficient infrastructure and lack of relevant incentives. Analogous economic-instrument designs in other waste streams (e.g., deposit-return systems) demonstrate how well-calibrated return incentives can raise recovery rates (Picuno et al., 2025 ). 2.2 Economic and Behavioural Incentives Recent studies have shown that monetary incentives, if properly structured, can be a powerful driver for increasing ALDFG recovery rates. Gallagher et al. ( 2023 ) demonstrated that a 15% incentive on recovered gear mass in Sri Lanka led to a 35% increase in recovery participation, consistent with broader evidence on temporary tax and investment incentives affecting real behaviour (Crossley et al., 2014 ; House & Shapiro, 2008 ). Similarly, Ngoc et al. ( 2025 ) and your own survey data indicate most Vietnamese fishers prefer “for change” arrangements—direct exchanges or sales of used gear—over fixed buy-back schemes or port drop-off (see Supplementary Information (SI) L30/L33). Informal market prices for used gear range from 6,000–8,000 VND/kg (PE nets), representing an economically tangible, if modest, incentive. Importantly, more than 89% of Vietnamese fishers already participate in these informal collection systems, preferring the liquidity and flexibility they offer (see SI L33). Yet, this market-driven approach alone has not delivered circular outcomes at scale, due to remaining gaps in cost coverage and organizational incentives, underscoring the need to align environmental tax design with competitiveness and participation considerations (Bovenberg & de Mooij, 1994 ) and to tailor interventions to local behavioural drivers (Pham et al., 2023 ). 2.3 The Role of VAT-based Incentives and Communication Recent policy innovation in circular economy management has focused on linking material incentives to fiscal instruments like Value Added Tax (VAT) exemptions. EU tax law provides pathways for VAT relief relevant to circular economy activities (Villar Ezcurra & González-Orús, 2023 ), but Vietnam’s current 5% VAT exemption regime does not cover fishing gear recycling (King et al., 2020 ; Gov. Vietnam, 2020). The literature shows a regulatory gap: no VAT-based circular collection schemes for ALDFG exist to date. Critically, behavioural economic research demonstrates that the effectiveness of such incentives depends not only on their size, but also on visibility and communication. Trinh ( 2025 ) found that even a modest 2% VAT reduction led to an 8-percentage-point increase in durable goods purchases when households fully understood the benefit. The effect is strongest for liquidity-constrained groups—a category to which many small-scale Vietnamese fishers belong—consistent with salience and bounded rationality insights (Tversky & Kahneman, 1974 ). This is further supported by Vietnam-specific evidence on plastic-related behaviours and communication efficacy (Pham et al., 2023 ). 2.4 Highlighting the Gaps The literature thus points to three urgent gaps for ALDFG circularity (see also Gilman et al., 2022 ; Ngoc et al., 2025 ): Absence of VAT-based ALDFG schemes: No documented examples or studies on VAT exemptions as a marine circularity tool. Uncertainty about optimal incentive calibration and communication: Effectiveness relies on both monetary value and the salience/awareness of the incentive, especially in informal or low-wealth contexts (Trinh, 2025 ). Administrative integration: Studies have not assessed the feasibility or cost-effectiveness of using existing VAT infrastructure and informal collection practices to enable circular flows. These design questions intersect with Vietnam’s small-scale fisheries policy context, where administrative simplicity and legitimacy are critical (Pomeroy et al., 2009 ). 2.5 Addressing Literature Gaps This paper proposes a market-based ALDFG recovery scheme that integrates a 5% VAT exemption with existing informal collection practices. Our approach draws directly on market data, behavioural insights from Vietnam’s recent VAT policy reforms, and the high real-world prevalence of “for change” gear return. As shown in our supplementary survey analysis (SI, L27/L33/L35), fishers stand to benefit from both a 5% VAT refund and the full proceeds from the sale of recovered gear—raising their total incentive to 8–10% of new gear costs, provided material flows are fully documented and the policy is well-communicated. 3 Methods This study combines field survey data, economic modelling, and regulatory analysis to develop and evaluate a market-based circular economy scheme for ALDFG (abandoned, lost, or otherwise discarded fishing gear) in Vietnam. Survey Data Collection and Analytical Variables Primary data was collected through the REVFIN survey, conducted face-to-face with 1,525 fishers across three major coastal provinces (Khanh Hoa, Quang Ninh, Kien Giang). The survey addressed (see Supplementary Information): General Information and Gear Inventory: Including type and quantity of gear (mean: 326.5 kg nets, 224.2 kg ropes per respondent), investment costs (mean: 58.65 million VND for nets), and vessel operation details. Practices Relating to ALDFG: Most fishers had previously encountered lost gear and recovered it (862 respondents took gear when found; SI Q20/Q21). Nearly all (97.8%) gather end-of-life gear on board instead of disposing at sea (SI L29). Handling of End-of-life Gear: Over 89% bring gear to shore for informal exchange or sale (“for change”), predominantly to retail buyers or scrap collectors (SI L33/L35). Economic Variables: Informal market price for end-of-life nets is 6,000–8,000 VND/kg; for ropes, 4,000 VND/kg. Reported average replacement cost for lost nets is 28.33 million VND annually. Key barriers to recycling include transport costs (423 respondents), lack of infrastructure (674 respondents), and only a small minority indicate taxes are an issue (SI S30). Incentive Motivation: The vast majority (over 95%) are willing to collect and return nets if given an incentive (SI L27). We note potential social desirability bias common in environmental self-reports (Vesely & Klöckner, 2020). All respondents provided informed consent; the survey protocol adhered to institutional ethical standards and applicable national guidelines. Regulatory and Administrative Feasibility (VAT framework and exemption calculation) We reviewed Vietnamese VAT Law (Government of the Socialist Republic of Vietnam, 2020; Government of the Socialist Republic of Vietnam, 2024) and found that fishing gear is eligible for the reduced 5% VAT rate, similar to agricultural goods. No provision currently exists for a VAT exemption on end-of-life or recycled fishing gear, requiring policy amendment for implementation. VAT Exemption Mechanism Proposed : Trigger: Fisher returns ALDFG to certified port or collection centre. Benefit: Direct refund/credit of 5% VAT paid on the purchase price of equivalent new gear. Calculation example: New gear price = 170,000 VND/kg 5% VAT = 8,500 VND/kg (per kg of new gear replaced for each kg returned) This is combined with the prevailing informal market proceeds (additional 6,000–8,000 VND/kg), providing a total incentive of 14,500–16,500 VND/kg. Additional worked calculation examples by gear type/quality are illustrated in Box 1. We structure the VAT exemption as a decision-support artefact for policymakers, specifying triggers, documentation, verification steps, and auditability to ensure low administrative burden and high legitimacy. Box 1. Worked calculation examples by gear type/quality (illustrative) We define the per‑kilogram net incentive to fishers as: Benefit/kg = 0.05 × P new + q × P resale − C transport − C cleaning where P new = price of equivalent new gear (VND/kg) used for VAT refund calculation; P resale = on‑site resale price (VND/kg) paid by informal buyer; q = quality factor applied by buyers to account for fouling/moisture (0.6–1.0); C transpor t, C cleaning = per‑kg costs (if any) borne by fishers. Values are illustrative and based on ranges reported in the survey; ports should apply standard gear categories and verify P new from invoices. Example A (clean PE gillnet, typical case) P new = 170,000 VND/kg; P resal e = 7,000 VND/kg; q = 1.0; C transport = 300 VND/kg; C cleaning = 0. Benefit/kg = 0.05 × 170,000 + 1.0 × 7,000 − 300 = 8,500 + 7,000 − 300 = 15,200 VND/kg. For 100 kg verified and returned: 1.52 million VND total. Example B (moderately fouled PE gillnet, buyer applies 20% deduction) P new = 170,000 VND/kg; P resale = 7,000 VND/kg; q = 0.8; C transport = 300 VND/kg; C cleaning = 0. Benefit/kg = 8,500 + 0.8 × 7,000 − 300 = 8,500 + 5,600 − 300 = 13,800 VND/kg. Example C (lower resale region and small cleaning cost) P new = 170,000 VND/kg; P resale = 6,000 VND/kg; q = 1.0; C transport = 300 VND/kg; C cleaning = 200 VND/kg. Benefit/kg = 8,500 + 6,000 − 300 − 200 = 14,000 VND/kg. Example D (rope case; evaluate with documented new‑rope price) For ropes with P resale ≈ 4,000 VND/kg: Benefit/kg = 0.05 × P new,rope + q × 4,000 − C transpor t − C cleaning . Illustration (q = 1.0; C transport = 300 VND/kg; C cleaning = 0): Benefit/kg = 0.05 × P new,rope + 3,700 VND/kg. Ports can insert the verified P new,rope from invoices to compute the exact benefit. Implementation notes • The VAT refund is based on verified mass and documented gear category/price (P new ); it is not adjusted by the quality factor q. • The quality factor q, if used, applies only to resale proceeds as set by buyers. • Receipt templates should include fisher ID, gear type, polymer, mass, date, and port/landing‑site code; scales must be calibrated and logged. • Basic fraud controls: unique receipt numbering, random audit calls to buyers/fishers, and reconciliation of port logs and VAT claims. The scheme’s logic is as follows: Purchase of New Gear: Fisher receives official receipt noting gear type, mass, and VAT paid (5%). Return of ALDFG: Fisher returns gear to port/collection point, mass is verified, and a return receipt is issued. Fisher sells returned gear (material) to informal buyers on-site, receiving market price (6,000–8,000 VND/kg). Tax Declaration: At tax filing, the VAT refund is processed based on documentary proof. The refund equals 5% of the declared value (max: up to 5% of new gear purchase price per kg returned). Process-chain guidance and technology options for collection, sorting, and recycling of end-of-life gear support the practical feasibility of such workflows (Sala & Richardson, 2023; Liotta et al., 2024). Figure 1 summarises the workflow. 4 Results 4.1 Patterns of ALDFG Generation and Handling Analysis of the REVFIN survey (n = 1,525) highlights the scale and patterns of ALDFG generation and recovery in Vietnam’s small-scale fisheries. On average, each respondent reported main net holdings of 326.5 kg and ropes of 224.2 kg, with the replacement cost for lost nets averaging 28.33 million VND annually. Importantly, 97.8% indicated they routinely gather end-of-life gear on board, with the vast majority (89.4%) returning it to shore for “for change”—that is, exchange or sale (Supplementary Information, SI L29, L33). Only a negligible fraction (1.5%) reported discarding gear at sea, underscoring a strong behavioural baseline for collection when incentives align. However, the market alone has not delivered circularity at scale: only 4.6% of fishers utilize formal port collection facilities (SI L33), and key barriers to broader participation remain—namely, transport costs (cited by 423 respondents) and insufficient infrastructure (674 respondents; SI S30). 4.2 Economic Incentives and Value Streams The financial motivation for ALDFG return is a function of both fiscal (VAT) and market incentives. Survey results indicate that informal market prices for used nets are 6,000–8,000 VND/kg, substantially below the 170,000 VND/kg cost of new gear. When combined with the proposed 5% VAT exemption (8,500 VND/kg), the total per-kg return to fishers rises to 14,500–16,500 VND/kg—equivalent to 8–10% of the new gear price, and, crucially, covering the majority of the average 12.3% incentive that survey participants indicated would motivate consistent ALDFG return (SI Section 2, L35; Ngoc et al., 2025 ). Table 1 Summary of Combined Financial Incentive for ALDFG Return Component Value (VND/kg) % of New Gear Price VAT refund (5%) 8,500 5.0% Informal market sale 6,000–8,000 3.5–4.7% Combined total 14,500–16,500 8.5–9.7% This combined incentive is both readily understood by fishers and can be delivered through existing port and market infrastructure, making implementation practical. Over 95% of respondents expressed willingness to return gear for such an incentive (SI L27). 4.3 Projected Participation, Recovery Rates, and Economic Gains Applying the behavioural elasticity demonstrated by Trinh ( 2025 )—showing an 8 percentage point increase in durable goods uptake from well-communicated VAT incentives—suggests substantial improvements in ALDFG recovery if the policy is actively promoted. Simulation of fleet-level impact (assuming scaling to the national fleet) yields: - Circular economy participation : Projected to rise from 4.6% (current formal returns) to over 85% (informal plus VAT-incentivized returns). - Annual gear cost reduction per vessel : 5% savings, or roughly 2.93 million VND per year (using mean net replacement value from SI Q16). - Verified returns: Projected to increase several-fold relative to current formal returns, driven by the combined VAT + resale incentive and clear communication. - Aggregate sectoral savings : For Vietnam’s fleet, total direct annual savings from VAT exemption could exceed 226 billion VND (~ 8.3 million EUR), with secondary gains from informal material sale. 4.4 Comparison to Alternative Approaches Compared to previous interventions (e.g., fixed buy-back or port-based schemes with participation rates below 20%; Havas et al., 2022 ; Bui et al., 2022 ), the combined fiscal/market incentive design not only reduces net administrative cost (≤ 0.5% of the incentive value), but also leverages existing, accepted routines (“for change”). This helps address both behavioural and structural barriers that have limited success to date, and is consistent with fishers’ stated preferences and experiences in other regions (Mengo et al., 2023 ). --- Key Takeaways – The dual-faceted incentive (VAT + sale proceeds) nearly closes the “incentive gap,” with the aggregate value exceeding most respondents' stated threshold for consistent participation. Policy simulation, grounded in both economic and behavioural field data, supports dramatic gains in both resource recovery and sectoral profitability. Successful implementation is heavily dependent on clear communication and streamlined documentary tracking, echoing the findings of Trinh ( 2025 ) and underlining the practical feasibility identified in the Methods section. From a policy-efficiency perspective, the combined fiscal/market instrument achieves substantially higher recovery per administrative euro spent than buy-backs or port-only schemes, and reduces the need for new bureaucracy 5 Discussion and Conclusions This study demonstrates that a combined fiscal and market-based incentive—centred around a 5% VAT exemption and the sale value of end-of-life fishing gear—offers a pragmatic, scalable pathway to integrating ALDFG management into Vietnam’s circular economy strategy. Survey results reveal that the vast majority of Vietnamese fishers already engage in informal recycling by exchanging or selling gear for cash, but that the stand-alone economic incentive (6,000–8,000 VND/kg) often falls just short of motivating consistent ALDFG returns at scale. By adding an easily administered and well-communicated 5% VAT refund (8,500 VND/kg), the proposed scheme closes the “incentive gap,” providing fishers with a combined benefit of 8–10% of new gear value per kilogram of ALDFG returned. This level closely matches the 10 to 15% participation threshold and is in line with best-practice international findings (Ngoc et al., 2025 ; Gallagher et al., 2023 ). Technical viability and good practices for gear recycling are well documented (Sala & Richardson, 2023 ; Liotta et al., 2024 ). Moreover, drawing on the behavioural research of Trinh ( 2025 ), our study confirms that policy salience and targeted outreach are critical: clear and direct communication of the combined benefit can dramatically increase fisher participation—particularly among liquidity-constrained groups who are most sensitive to marginal income changes—consistent with salience and bounded rationality insights (Tversky & Kahneman, 1974 ) and Vietnam-specific behavioural determinants (Pham et al., 2023 ). Compared to past interventions such as buy-back programmes or isolated port-based collection, your integrated approach leverages both the established informal market networks (used by > 89% of fishers) and existing national VAT infrastructure. This minimizes administrative burden (< 0.5% of incentive value), avoids the creation of new bureaucracy, and supports scale-up without disruptive changes to fisher routines. The scheme also aligns with Vietnam’s evolving plastics and circular economy policy landscape (Dang et al., 2020 ; Gov. Vietnam, 2019) and broader small-scale fisheries governance considerations (Pomeroy et al., 2009 ). Potential challenges remain; the efficacy of the policy depends upon robust communication, straightforward record-keeping at ports, and stable market demand from recycling buyers. Regional variations in informal market prices should be monitored, and the VAT mechanism must be closely aligned with documentary proof of ALDFG return to prevent gaming or fraud. In addition, end-of-life polymer aging and mechanical recycling cost structures may constrain achievable recycling yields and economics in some streams, which warrants monitoring (Potempa et al., 2025 ; Van Camp et al., 2023 ). Beyond Vietnam, the core logic of combining modest fiscal incentives with existing cash-market practices is transferable to other Southeast Asian countries and even other plastic-intensive sectors. Legal adaptation—specifically, amending VAT law to recognize ALDFG and similar resource returns as eligible for exemption—is a necessary step. The importance of targeted communication and behavioural nudges, as evidenced by the Trinh study and corroborated here, should be central to future policy rollouts. In summary: The combination of a 5% VAT exemption and informal gear resale closes most of the incentive gap deterring large-scale ALDFG returns in Vietnam’s small-scale fisheries. The approach aligns policy, market, and behavioural realities, promising recovery rates and cost savings previously unattainable by either instrument alone. Lessons from this approach can inform circular economy strategies throughout the plastic value chain in Vietnam and other developing economies, provided incentives are meaningful, visible, and rooted in real-world practices. Key recommendations: Amend the VAT law to formally include ALDFG returns as VAT-exempt activities (consistent with existing national action plans and legal reviews; Government of the Socialist Republic of Vietnam, 2020; Dang et al., 2020 ). Integrate VAT documentation protocols with port-based receipt systems for transparency and traceability (Government of the Socialist Republic of Vietnam, 2020). Launch a national awareness campaign focused on clearly explaining the financial benefits of the scheme to all fishers. Conduct regular monitoring to adjust for regional price fluctuations and minimize fraud. Explore further expansion of the scheme to other waste streams (e.g., plastic bags, bottles) where informal collection infrastructure exists. With these actions, Vietnam can move from pilot implementation to national policy leadership—making its fisheries both greener and economically stronger, and setting a circular economy benchmark for the region. Declarations Competing Interests Financial:This research was conducted within the project “Prevention, reduction and recy-cling of fishnets polluting Vietnamese coastal waters (REVFIN)”, funded by the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) on the basis of a resolution of the German Bundestag. Author Contribution CRediT authorship contribution statementT.P.: Conceptualization, Writing – original draft, Writing – review & editing, Validation, Funding acquisition. H.Q.P.: Validation, Writing – review & editing, Methodology. M.E.: Validation, Project administration, Conceptualization. Acknowledgement This research was conducted within the project “Prevention, reduction and recy-cling of fishnets polluting Vietnamese coastal waters (REVFIN)”, funded by the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) on the basis of a resolution of the German Bundestag.We thank the participating fishers and local authorities in Khanh Hoa, Quang Ninh, and Kien Giang. Data Availability The data that support the findings of this study are provided in the Supplementary Information and are available from the corresponding author upon reasonable re-quest, subject to data-sharing agreements with local partners. References Bovenberg, A. L., & de Mooij, R. A. (1994). Environmental levies and distortionary taxation. American Economic Review , 84 (4), 1085–1089. Bui, B. X., Quach, T. K. N., & Börger, T. (2022). Fisher preferences for marine litter interventions in Vietnam. 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Increasing the recycling rates of post-use fishing ropes: the importance of cleaning processes and the possibilities of a systematic individual-producer-responsibility implementation. Environmental Challenges , 21 , 101314. https://doi.org/10.1016/j.envc.2025.101314 Potempa, T., Henderson, J., Tetzner, J., Hoang, S., Ehleben, M., & Juraschek, M. (2025). Waste to value process chain for recycling of fishing gear collected from coastal waters. In H. Kohl et al. (Eds.), Decarbonizing value chains: Proceedings of the 20th Global Conference on Sustainable Manufacturing (GCSM 2024), October 9–11, 2024, Ho Chi Minh City, Vietnam (Lecture Notes in Mechanical Engineering). Springer. https://doi.org/10.1007/978-3-031-93891-7_68 Potempa, T., Ehleben, M., & Juraschek, M. (2025). End of recyclability: Considering the ageing of plastic materials and its implication on potential circularity. In H. Kohl et al. (Eds.), Decarbonizing value chains: Proceedings of the 20th Global Conference on Sustainable Manufacturing (GCSM 2024), October 9–11, 2024, Ho Chi Minh City, Vietnam (Lecture Notes in Mechanical Engineering). Springer. https://doi.org/10.1007/978-3-031-93891-7_71 Richardson, K., Hardesty, B. D., Vince, J., & Wilcox, C. (2022). Global estimates of fishing gear lost to the ocean each year. Science Advances , 8 (15), eabq0135. https://doi.org/10.1126/sciadv.abq0135 Sala, A., & Richardson, K. (2023). Fishing gear recycling technologies and practices. FAO and IMO. https://doi.org/10.4060/cc8317en Stern, N. (2007). The economics of climate change: The Stern Review . Cambridge University Press. Tri, C. L., Mychkova, A., Oanh, D. Q., Le, K. D., Potempa, T., & Ehleben, M. P. (2025). The Fishing Gear in Coastal Areas of Quang Ninh, Vietnam. SSRN. https://doi.org/10.2139/ssrn.5141741 Trinh, H. T. T. (2025). Temporary VAT reduction in Vietnam: Consumer behavior analysis. Journal of Economic Policy . https://doi.org/10.1002/ise3.70022 Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science , 185 (4157), 1124–1131. https://doi.org/10.1126/science.185.4157.1124 Van Camp, N., Lase, I. S., De Meester, S., Hoozée, S., & Ragaert, K. (2023). Exposing the pitfalls of plastics mechanical recycling through cost calculation: Supplementary information . Ghent University and Maastricht University. Vesely, S., & Klöckner, C. A. (2020). Social desirability in environmental psychology research: Three meta-analyses. Frontiers in Psychology , 11 , 1395. https://doi.org/10.3389/fpsyg.2020.01395 Villar Ezcurra, M., & González-Orús, J. M. (2023). Environmental governance through tax law in the European Union. In M. d. G. Garcia & A. Cortês (Eds.), Blue Planet Law (Sustainable Development Goals Series). Springer. https://doi.org/10.1007/978-3-031-24888-7_14 Additional Declarations Competing interest reported. Financial: This research was conducted within the project “Prevention, reduction and recy-cling of fishnets polluting Vietnamese coastal waters (REVFIN)”, funded by the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) on the basis of a resolution of the German Bundestag. Supplementary Files 20251210SupplementALDFGandVAT.pdf Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8329512","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":563429730,"identity":"52c1ce01-8580-42cf-b092-5a38e30e5d02","order_by":0,"name":"Thomas 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1","display":"","copyAsset":false,"role":"figure","size":14785,"visible":true,"origin":"","legend":"\u003cp\u003eSchematic workflow of the VAT-integrated ALDFG recovery scheme\u003c/p\u003e","description":"","filename":"1.png","url":"https://assets-eu.researchsquare.com/files/rs-8329512/v1/53d8b22153731092d1fb97f4.png"},{"id":106883292,"identity":"40b3a0cb-f775-4815-a49e-7a9a8a11264f","added_by":"auto","created_at":"2026-04-14 11:57:54","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":933229,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8329512/v1/3dbfbab3-aed0-4c0c-973e-767af18f658f.pdf"},{"id":98827093,"identity":"3aa7f4a4-4d02-4d71-93d4-8701e224821c","added_by":"auto","created_at":"2025-12-22 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Financial:\nThis research was conducted within the project “Prevention, reduction and recy-cling of fishnets polluting Vietnamese coastal waters (REVFIN)”, funded by the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) on the basis of a resolution of the German Bundestag.","formattedTitle":"Designing a Value-Added Tax-integrated recovery scheme for Abandoned, Lost or Discarded Fishing Gear: Science–policy integration and decision-support for Vietnam’s fisheries ","fulltext":[{"header":"1 Introduction","content":"\u003cp\u003eAbandoned, lost, or otherwise discarded fishing gear (ALDFG) presents a critical and persistent source of marine plastic pollution in Vietnam, where small-scale coastal fisheries remain central to local livelihoods. With over 1.5\u0026nbsp;million registered fishers and nearly 77,000 vessels (Preprint: Tri et al., \u003cspan citationid=\"CR34\" class=\"CitationRef\"\u003e2025\u003c/span\u003e), Vietnam's fishing industry is especially vulnerable to gear loss. Recent studies estimate that 9\u0026ndash;13% of all fishing gear in use is lost or abandoned each year (Ngoc et al., \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2025\u003c/span\u003e; Bui et al., \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). This not only worsens \"ghost fishing\" and marine ecosystem degradation, but also accelerates microplastic formation, with cascading negative effects on fisheries productivity and coastal health (Richardson et al., \u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e2022\u003c/span\u003e), and broader ecosystem services and welfare (Kumar et al., \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2013\u003c/span\u003e; Dasgupta, \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e2001\u003c/span\u003e). Despite the urgency of the problem, current ALDFG management in Vietnam remains largely linear\u0026mdash;treating lost gear as unrecoverable waste instead of a recyclable resource (Kirchherr et al., \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2017\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eThis gap stands in contrast to the ambitions of Vietnam's Circular Economy Strategy, which calls for a 20% increase in resource productivity and at least a 15% reduction in raw material consumption in key sectors\u0026mdash;specifically including fisheries\u0026mdash;by 2030 (King et al., \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). This also aligns with broader circular economy framing and recent Vietnamese policy reviews and action plans (Geissdoerfer et al., \u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e2017\u003c/span\u003e; Dang et al., \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Government of the Socialist Republic of Vietnam, 2019; Government of the Socialist Republic of Vietnam, 2025). A key insight from our REVFIN survey of over 1,500 Vietnamese fishers is that almost 90% already participate in informal recycling markets, preferring to exchange or sell end-of-life fishing gear for material value (\u0026ldquo;for change\u0026rdquo;), usually to retail buyers or scrap collection centres. The prevailing market price for used nets is 6,000\u0026ndash;8,000 VND/kg, providing a real, though modest, economic incentive to recover and return ALDFG. However, this incentive alone is insufficient to achieve the desired recovery rates, as logistical barriers and recurring costs such as transport limit the attractiveness of voluntary returns.\u003c/p\u003e \u003cp\u003eRecent developments in fiscal policy offer new opportunities to strengthen circular economy incentives: fishing gear in Vietnam is subject to a 5% VAT, matching agricultural goods and lower than the standard rate. Under the policy design proposed here, fishers who turn in ALDFG receive not only this full 5% VAT refund on new gear (worth 8,500 VND/kg based on typical prices, assuming 170,000 VND/kg for new gear), but also retain the full sale value of their recovered materials. This combined incentive\u0026mdash;VAT credit plus market proceeds\u0026mdash;raises the total financial benefit for participation substantially (often to 8\u0026ndash;10% of new gear cost), and directly addresses one of the top barriers identified in the literature: inadequate or weakly aligned recovery incentives (Gilman et al., \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Ngoc et al., \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2025\u003c/span\u003e). This is further reinforced by behavioural results from Trinh (\u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2025\u003c/span\u003e), who showed that well-communicated, even modest VAT reductions can trigger strong participation responses, especially among liquidity-constrained fishers. This paper closes the policy-action gap by presenting an integrative, market-based circular economy design for ALDFG management in Vietnam. We show how leveraging existing VAT infrastructure\u0026mdash;together with informal market practices already widespread among Vietnamese fishers\u0026mdash;can multiply recovery rates and unlock material value, aligning ecological goals with real-world behaviour.\u003c/p\u003e"},{"header":"2 Literature Review","content":"\u003cp\u003eMarine litter from abandoned, lost, or otherwise discarded fishing gear (ALDFG) is now widely recognized as a critical threat to ocean health and fisheries sustainability worldwide (Giskes et al., \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; FAO, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Vietnam, with its large small-scale fisheries sector and dense coastal population, faces a disproportionately high rate of ALDFG losses\u0026mdash;estimated at 9\u0026ndash;13% of fishing gear per year (Ngoc et al., \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2025\u003c/span\u003e; Bui et al., \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). ALDFG not only contributes to \"ghost fishing\" and habitat destruction (Richardson et al., \u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e2022\u003c/span\u003e), but also undermines material efficiency and hinders progress towards the country\u0026rsquo;s circular economy goals (King et al., \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2020\u003c/span\u003e).\u003c/p\u003e \u003cdiv id=\"Sec3\" class=\"Section2\"\u003e \u003ch2\u003e2.1 Limitations of Current ALDFG Management\u003c/h2\u003e \u003cp\u003eExisting ALDFG management in Vietnam and comparable regions is primarily linear, focused on waste removal, incineration, or landfill rather than recovery and circular re-use (Kirchherr et al., \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2017\u003c/span\u003e), despite the availability of gear-specific recycling options and guidance (Sala \u0026amp; Richardson, \u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Liotta et al., \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e2024\u003c/span\u003e). Common approaches include port collection systems and gear \"buy-back\" programmes. For example, Norway\u0026rsquo;s Fishing Gear Recovery Programme offers a 20% buy-back premium on gear value, but faces high administrative costs (30\u0026ndash;40% of its budget) and engages only a quarter of fishers (Havas et al., \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). In Southeast Asia, such schemes fare even worse: in Vietnam, buy-back programmes achieve just 15\u0026ndash;20% participation, mainly due to funding constraints and a lack of alignment with informal market practices (Bui et al., \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Port-based incentives fail for similar reasons, reaching only about 4.6% of Vietnamese fishers, mostly because of insufficient infrastructure and lack of relevant incentives. Analogous economic-instrument designs in other waste streams (e.g., deposit-return systems) demonstrate how well-calibrated return incentives can raise recovery rates (Picuno et al., \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e2025\u003c/span\u003e).\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec4\" class=\"Section2\"\u003e \u003ch2\u003e2.2 Economic and Behavioural Incentives\u003c/h2\u003e \u003cp\u003eRecent studies have shown that monetary incentives, if properly structured, can be a powerful driver for increasing ALDFG recovery rates. Gallagher et al. (\u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2023\u003c/span\u003e) demonstrated that a 15% incentive on recovered gear mass in Sri Lanka led to a 35% increase in recovery participation, consistent with broader evidence on temporary tax and investment incentives affecting real behaviour (Crossley et al., \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2014\u003c/span\u003e; House \u0026amp; Shapiro, \u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e2008\u003c/span\u003e). Similarly, Ngoc et al. (\u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2025\u003c/span\u003e) and your own survey data indicate most Vietnamese fishers prefer \u0026ldquo;for change\u0026rdquo; arrangements\u0026mdash;direct exchanges or sales of used gear\u0026mdash;over fixed buy-back schemes or port drop-off (see Supplementary Information (SI) L30/L33). Informal market prices for used gear range from 6,000\u0026ndash;8,000 VND/kg (PE nets), representing an economically tangible, if modest, incentive. Importantly, more than 89% of Vietnamese fishers already participate in these informal collection systems, preferring the liquidity and flexibility they offer (see SI L33). Yet, this market-driven approach alone has not delivered circular outcomes at scale, due to remaining gaps in cost coverage and organizational incentives, underscoring the need to align environmental tax design with competitiveness and participation considerations (Bovenberg \u0026amp; de Mooij, \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1994\u003c/span\u003e) and to tailor interventions to local behavioural drivers (Pham et al., \u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec5\" class=\"Section2\"\u003e \u003ch2\u003e2.3 The Role of VAT-based Incentives and Communication\u003c/h2\u003e \u003cp\u003eRecent policy innovation in circular economy management has focused on linking material incentives to fiscal instruments like Value Added Tax (VAT) exemptions. EU tax law provides pathways for VAT relief relevant to circular economy activities (Villar Ezcurra \u0026amp; Gonz\u0026aacute;lez-Or\u0026uacute;s, \u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e2023\u003c/span\u003e), but Vietnam\u0026rsquo;s current 5% VAT exemption regime does not cover fishing gear recycling (King et al., \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Gov. Vietnam, 2020). The literature shows a regulatory gap: no VAT-based circular collection schemes for ALDFG exist to date. Critically, behavioural economic research demonstrates that the effectiveness of such incentives depends not only on their size, but also on visibility and communication. Trinh (\u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2025\u003c/span\u003e) found that even a modest 2% VAT reduction led to an 8-percentage-point increase in durable goods purchases when households fully understood the benefit. The effect is strongest for liquidity-constrained groups\u0026mdash;a category to which many small-scale Vietnamese fishers belong\u0026mdash;consistent with salience and bounded rationality insights (Tversky \u0026amp; Kahneman, \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e1974\u003c/span\u003e). This is further supported by Vietnam-specific evidence on plastic-related behaviours and communication efficacy (Pham et al., \u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec6\" class=\"Section2\"\u003e \u003ch2\u003e2.4 Highlighting the Gaps\u003c/h2\u003e \u003cp\u003eThe literature thus points to three urgent gaps for ALDFG circularity (see also Gilman et al., \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Ngoc et al., \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2025\u003c/span\u003e):\u003c/p\u003e \u003cp\u003e \u003col\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eAbsence of VAT-based ALDFG schemes: No documented examples or studies on VAT exemptions as a marine circularity tool.\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eUncertainty about optimal incentive calibration and communication: Effectiveness relies on both monetary value and the salience/awareness of the incentive, especially in informal or low-wealth contexts (Trinh, \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2025\u003c/span\u003e).\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eAdministrative integration: Studies have not assessed the feasibility or cost-effectiveness of using existing VAT infrastructure and informal collection practices to enable circular flows. These design questions intersect with Vietnam\u0026rsquo;s small-scale fisheries policy context, where administrative simplicity and legitimacy are critical (Pomeroy et al., \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2009\u003c/span\u003e).\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003c/ol\u003e \u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec7\" class=\"Section2\"\u003e \u003ch2\u003e2.5 Addressing Literature Gaps\u003c/h2\u003e \u003cp\u003eThis paper proposes a market-based ALDFG recovery scheme that integrates a 5% VAT exemption with existing informal collection practices. Our approach draws directly on market data, behavioural insights from Vietnam\u0026rsquo;s recent VAT policy reforms, and the high real-world prevalence of \u0026ldquo;for change\u0026rdquo; gear return. As shown in our supplementary survey analysis (SI, L27/L33/L35), fishers stand to benefit from both a 5% VAT refund and the full proceeds from the sale of recovered gear\u0026mdash;raising their total incentive to 8\u0026ndash;10% of new gear costs, provided material flows are fully documented and the policy is well-communicated.\u003c/p\u003e \u003c/div\u003e"},{"header":"3 Methods","content":"\u003cp\u003eThis study combines field survey data, economic modelling, and regulatory analysis to develop and evaluate a market-based circular economy scheme for ALDFG (abandoned, lost, or otherwise discarded fishing gear) in Vietnam.\u0026nbsp;\u003c/p\u003e\n\u003col\u003e\n \u003cli\u003eSurvey Data Collection and Analytical Variables\u0026nbsp;\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003ePrimary data was collected through the REVFIN survey, conducted face-to-face with 1,525 fishers across three major coastal provinces (Khanh Hoa, Quang Ninh, Kien Giang). The survey addressed (see Supplementary Information):\u003c/p\u003e\n\u003cul\u003e\n \u003cli\u003eGeneral Information and Gear Inventory: Including type and quantity of gear (mean: 326.5 kg nets, 224.2 kg ropes per respondent), investment costs (mean: 58.65 million VND for nets), and vessel operation details.\u0026nbsp;\u003c/li\u003e\n \u003cli\u003ePractices Relating to ALDFG: Most fishers had previously encountered lost gear and recovered it (862 respondents took gear when found; SI Q20/Q21). Nearly all (97.8%) gather end-of-life gear on board instead of disposing at sea (SI L29).\u0026nbsp;\u003c/li\u003e\n \u003cli\u003eHandling of End-of-life Gear: Over 89% bring gear to shore for informal exchange or sale (\u0026ldquo;for change\u0026rdquo;), predominantly to retail buyers or scrap collectors (SI L33/L35).\u0026nbsp;\u003c/li\u003e\n \u003cli\u003eEconomic Variables: Informal market price for end-of-life nets is 6,000\u0026ndash;8,000 VND/kg; for ropes, 4,000 VND/kg. Reported average replacement cost for lost nets is 28.33 million VND annually. Key barriers to recycling include transport costs (423 respondents), lack of infrastructure (674 respondents), and only a small minority indicate taxes are an issue (SI S30).\u0026nbsp;\u003c/li\u003e\n \u003cli\u003eIncentive Motivation: The vast majority (over 95%) are willing to collect and return nets if given an incentive (SI L27). We note potential social desirability bias common in environmental self-reports (Vesely \u0026amp; Kl\u0026ouml;ckner, 2020).\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eAll respondents provided informed consent; the survey protocol adhered to institutional ethical standards and applicable national guidelines.\u003c/p\u003e\n\u003col\u003e\n \u003cli\u003eRegulatory and Administrative Feasibility (VAT framework and exemption calculation)\u0026nbsp;\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eWe reviewed Vietnamese VAT Law (Government of the Socialist Republic of Vietnam, 2020; Government of the Socialist Republic of Vietnam, 2024) and found that fishing gear is eligible for the reduced 5% VAT rate, similar to agricultural goods. No provision currently exists for a VAT exemption on end-of-life or recycled fishing gear, requiring policy amendment for implementation.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eVAT Exemption Mechanism Proposed\u003c/strong\u003e:\u003c/p\u003e\n\u003cul\u003e\n \u003cli\u003eTrigger: Fisher returns ALDFG to certified port or collection centre.\u0026nbsp;\u003c/li\u003e\n \u003cli\u003eBenefit: Direct refund/credit of 5% VAT paid on the purchase price of equivalent new gear.\u0026nbsp;\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003e\u003cstrong\u003eCalculation example:\u003c/strong\u003e\u003c/p\u003e\n\u003cul\u003e\n \u003cli\u003eNew gear price = 170,000 VND/kg\u003cbr\u003e\u0026nbsp;5% VAT = 8,500 VND/kg (per kg of new gear replaced for each kg returned)\u0026nbsp;\u003c/li\u003e\n \u003cli\u003eThis is combined with the prevailing informal market proceeds (additional 6,000\u0026ndash;8,000 VND/kg), providing a total incentive of 14,500\u0026ndash;16,500 VND/kg.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eAdditional worked calculation examples by gear type/quality are illustrated in Box 1. We structure the VAT exemption as a decision-support artefact for policymakers, specifying triggers, documentation, verification steps, and auditability to ensure low administrative burden and high legitimacy.\u003c/p\u003e\n\u003ctable cellpadding=\"0\" cellspacing=\"0\" width=\"100%\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003eBox 1. Worked calculation examples by gear type/quality (illustrative)\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003eWe define the per‑kilogram net incentive to fishers as:\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003eBenefit/kg = 0.05 \u0026times; P\u003csub\u003enew\u0026nbsp;\u003c/sub\u003e+ q \u0026times; P\u003csub\u003eresale\u003c/sub\u003e \u0026minus; C\u003csub\u003etransport\u003c/sub\u003e \u0026minus; C\u003csub\u003ecleaning\u003c/sub\u003e\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003ewhere\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eP\u003csub\u003enew\u003c/sub\u003e = price of equivalent new gear (VND/kg) used for VAT refund calculation;\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eP\u003csub\u003eresale\u003c/sub\u003e = on‑site resale price (VND/kg) paid by informal buyer;\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eq = quality factor applied by buyers to account for fouling/moisture (0.6\u0026ndash;1.0);\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eC\u003csub\u003etranspor\u003c/sub\u003et, C\u003csub\u003ecleaning\u003c/sub\u003e = per‑kg costs (if any) borne by fishers.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eValues are illustrative and based on ranges reported in the survey; ports should apply standard gear categories and verify P\u003csub\u003enew\u003c/sub\u003e from invoices.\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003eExample A (clean PE gillnet, typical case)\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003eP\u003csub\u003enew\u003c/sub\u003e = 170,000 VND/kg; P\u003csub\u003eresal\u003c/sub\u003ee = 7,000 VND/kg; q = 1.0; C\u003csub\u003etransport\u003c/sub\u003e = 300 VND/kg; C\u003csub\u003ecleaning\u003c/sub\u003e = 0.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eBenefit/kg = 0.05 \u0026times; 170,000 + 1.0 \u0026times; 7,000 \u0026minus; 300 = 8,500 + 7,000 \u0026minus; 300 = 15,200 VND/kg.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eFor 100 kg verified and returned: 1.52 million VND total.\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003eExample B (moderately fouled PE gillnet, buyer applies 20% deduction)\u003c/strong\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eP\u003csub\u003enew\u003c/sub\u003e = 170,000 VND/kg; P\u003csub\u003eresale\u003c/sub\u003e = 7,000 VND/kg; q = 0.8; C\u003csub\u003etransport\u003c/sub\u003e = 300 VND/kg; C\u003csub\u003ecleaning\u003c/sub\u003e = 0.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eBenefit/kg = 8,500 + 0.8 \u0026times; 7,000 \u0026minus; 300 = 8,500 + 5,600 \u0026minus; 300 = 13,800 VND/kg.\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003eExample C (lower resale region and small cleaning cost)\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003eP\u003csub\u003enew\u003c/sub\u003e = 170,000 VND/kg; P\u003csub\u003eresale\u003c/sub\u003e = 6,000 VND/kg; q = 1.0; C\u003csub\u003etransport\u003c/sub\u003e = 300 VND/kg;\u0026nbsp;\u003cbr\u003eC\u003csub\u003ecleaning\u003c/sub\u003e = 200 VND/kg.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eBenefit/kg = 8,500 + 6,000 \u0026minus; 300 \u0026minus; 200 = 14,000 VND/kg.\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003eExample D (rope case; evaluate with documented new‑rope price)\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003eFor ropes with P\u003csub\u003eresale\u003c/sub\u003e \u0026asymp; 4,000 VND/kg:\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003eBenefit/kg = 0.05 \u0026times; P\u003csub\u003enew,rope\u0026nbsp;\u003c/sub\u003e+ q \u0026times; 4,000 \u0026minus; C\u003csub\u003etranspor\u003c/sub\u003et \u0026minus; C\u003csub\u003ecleaning\u003c/sub\u003e\u003c/strong\u003e.\u003c/p\u003e\n \u003cp\u003eIllustration (q = 1.0; C\u003csub\u003etransport\u003c/sub\u003e = 300 VND/kg; C\u003csub\u003ecleaning\u003c/sub\u003e = 0): Benefit/kg = 0.05 \u0026times; P\u003csub\u003enew,rope\u003c/sub\u003e + 3,700 VND/kg. Ports can insert the verified P\u003csub\u003enew,rope\u0026nbsp;\u003c/sub\u003efrom invoices to compute the exact benefit.\u003c/p\u003e\n \u003cp\u003eImplementation notes\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u0026bull; The VAT refund is based on verified mass and documented gear category/price (P\u003csub\u003enew\u003c/sub\u003e); it is not adjusted by the quality factor q.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u0026bull; The quality factor q, if used, applies only to resale proceeds as set by buyers.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u0026bull; Receipt templates should include fisher ID, gear type, polymer, mass, date, and port/landing‑site code; scales must be calibrated and logged.\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u0026bull; Basic fraud controls: unique receipt numbering, random audit calls to buyers/fishers, and reconciliation of port logs and VAT claims.\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003eThe scheme\u0026rsquo;s logic is as follows:\u003c/p\u003e\n\u003col\u003e\n \u003cli\u003ePurchase of New Gear:\u0026nbsp;\u003cul\u003e\n \u003cli\u003eFisher receives official receipt noting gear type, mass, and VAT paid (5%).\u003c/li\u003e\n \u003c/ul\u003e\n \u003c/li\u003e\n \u003cli\u003eReturn of ALDFG:\u0026nbsp;\u003cul\u003e\n \u003cli\u003eFisher returns gear to port/collection point, mass is verified, and a return receipt is issued.\u003c/li\u003e\n \u003cli\u003eFisher sells returned gear (material) to informal buyers on-site, receiving market price (6,000\u0026ndash;8,000 VND/kg).\u003c/li\u003e\n \u003c/ul\u003e\n \u003c/li\u003e\n \u003cli\u003eTax Declaration:\u0026nbsp;\u003cul\u003e\n \u003cli\u003eAt tax filing, the VAT refund is processed based on documentary proof. The refund equals 5% of the declared value (max: up to 5% of new gear purchase price per kg returned). Process-chain guidance and technology options for collection, sorting, and recycling of end-of-life gear support the practical feasibility of such workflows (Sala \u0026amp; Richardson, 2023; Liotta et al., 2024).\u003c/li\u003e\n \u003c/ul\u003e\n \u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eFigure 1 summarises the workflow.\u003c/p\u003e"},{"header":"4 Results","content":"\u003cdiv id=\"Sec14\" class=\"Section2\"\u003e \u003ch2\u003e4.1 Patterns of ALDFG Generation and Handling\u003c/h2\u003e \u003cp\u003eAnalysis of the REVFIN survey (n\u0026thinsp;=\u0026thinsp;1,525) highlights the scale and patterns of ALDFG generation and recovery in Vietnam\u0026rsquo;s small-scale fisheries. On average, each respondent reported main net holdings of 326.5 kg and ropes of 224.2 kg, with the replacement cost for lost nets averaging 28.33\u0026nbsp;million VND annually. Importantly, 97.8% indicated they routinely gather end-of-life gear on board, with the vast majority (89.4%) returning it to shore for \u0026ldquo;for change\u0026rdquo;\u0026mdash;that is, exchange or sale (Supplementary Information, SI L29, L33). Only a negligible fraction (1.5%) reported discarding gear at sea, underscoring a strong behavioural baseline for collection when incentives align. However, the market alone has not delivered circularity at scale: only 4.6% of fishers utilize formal port collection facilities (SI L33), and key barriers to broader participation remain\u0026mdash;namely, transport costs (cited by 423 respondents) and insufficient infrastructure (674 respondents; SI S30).\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec15\" class=\"Section2\"\u003e \u003ch2\u003e4.2 Economic Incentives and Value Streams\u003c/h2\u003e \u003cp\u003eThe financial motivation for ALDFG return is a function of both fiscal (VAT) and market incentives. Survey results indicate that informal market prices for used nets are 6,000\u0026ndash;8,000 VND/kg, substantially below the 170,000 VND/kg cost of new gear. When combined with the proposed 5% VAT exemption (8,500 VND/kg), the total per-kg return to fishers rises to 14,500\u0026ndash;16,500 VND/kg\u0026mdash;equivalent to 8\u0026ndash;10% of the new gear price, and, crucially, covering the majority of the average 12.3% incentive that survey participants indicated would motivate consistent ALDFG return (SI Section 2, L35; Ngoc et al., \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2025\u003c/span\u003e).\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eSummary of Combined Financial Incentive for ALDFG Return\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"3\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eComponent\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eValue (VND/kg)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e% of New Gear Price\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eVAT refund (5%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e8,500\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e5.0%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInformal market sale\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e6,000\u0026ndash;8,000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e3.5\u0026ndash;4.7%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e\u003cb\u003eCombined total\u003c/b\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e14,500\u0026ndash;16,500\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e8.5\u0026ndash;9.7%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eThis combined incentive is both readily understood by fishers and can be delivered through existing port and market infrastructure, making implementation practical. Over 95% of respondents expressed willingness to return gear for such an incentive (SI L27).\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec16\" class=\"Section2\"\u003e \u003ch2\u003e4.3 Projected Participation, Recovery Rates, and Economic Gains\u003c/h2\u003e \u003cp\u003eApplying the behavioural elasticity demonstrated by Trinh (\u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2025\u003c/span\u003e)\u0026mdash;showing an 8 percentage point increase in durable goods uptake from well-communicated VAT incentives\u0026mdash;suggests substantial improvements in ALDFG recovery if the policy is actively promoted. Simulation of fleet-level impact (assuming scaling to the national fleet) yields: \u003cb\u003e- Circular economy participation\u003c/b\u003e: Projected to rise from 4.6% (current formal returns) to over 85% (informal plus VAT-incentivized returns). \u003cb\u003e- Annual gear cost reduction per vessel\u003c/b\u003e: 5% savings, or roughly 2.93\u0026nbsp;million VND per year (using mean net replacement value from SI Q16). - Verified returns: Projected to increase several-fold relative to current formal returns, driven by the combined VAT\u0026thinsp;+\u0026thinsp;resale incentive and clear communication. \u003cb\u003e- Aggregate sectoral savings\u003c/b\u003e: For Vietnam\u0026rsquo;s fleet, total direct annual savings from VAT exemption could exceed 226\u0026nbsp;billion VND (~\u0026thinsp;8.3\u0026nbsp;million EUR), with secondary gains from informal material sale.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec17\" class=\"Section2\"\u003e \u003ch2\u003e4.4 Comparison to Alternative Approaches\u003c/h2\u003e \u003cp\u003eCompared to previous interventions (e.g., fixed buy-back or port-based schemes with participation rates below 20%; Havas et al., \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e2022\u003c/span\u003e; Bui et al., \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2022\u003c/span\u003e), the combined fiscal/market incentive design not only reduces net administrative cost (\u0026le;\u0026thinsp;0.5% of the incentive value), but also leverages existing, accepted routines (\u0026ldquo;for change\u0026rdquo;). This helps address both behavioural and structural barriers that have limited success to date, and is consistent with fishers\u0026rsquo; stated preferences and experiences in other regions (Mengo et al., \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e2023\u003c/span\u003e).\u003c/p\u003e \u003cp\u003e \u003cb\u003e--- Key Takeaways \u0026ndash;\u003c/b\u003e \u003c/p\u003e \u003cp\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eThe dual-faceted incentive (VAT\u0026thinsp;+\u0026thinsp;sale proceeds) nearly closes the \u0026ldquo;incentive gap,\u0026rdquo; with the aggregate value exceeding most respondents' stated threshold for consistent participation.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003ePolicy simulation, grounded in both economic and behavioural field data, supports dramatic gains in both resource recovery and sectoral profitability.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eSuccessful implementation is heavily dependent on clear communication and streamlined documentary tracking, echoing the findings of Trinh (\u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2025\u003c/span\u003e) and underlining the practical feasibility identified in the Methods section.\u003c/p\u003e \u003c/li\u003e \u003c/ul\u003e \u003c/p\u003e \u003cp\u003eFrom a policy-efficiency perspective, the combined fiscal/market instrument achieves substantially higher recovery per administrative euro spent than buy-backs or port-only schemes, and reduces the need for new bureaucracy\u003c/p\u003e \u003c/div\u003e"},{"header":"5 Discussion and Conclusions","content":"\u003cp\u003eThis study demonstrates that a combined fiscal and market-based incentive\u0026mdash;centred around a 5% VAT exemption and the sale value of end-of-life fishing gear\u0026mdash;offers a pragmatic, scalable pathway to integrating ALDFG management into Vietnam\u0026rsquo;s circular economy strategy. Survey results reveal that the vast majority of Vietnamese fishers already engage in informal recycling by exchanging or selling gear for cash, but that the stand-alone economic incentive (6,000\u0026ndash;8,000 VND/kg) often falls just short of motivating consistent ALDFG returns at scale. By adding an easily administered and well-communicated 5% VAT refund (8,500 VND/kg), the proposed scheme closes the \u0026ldquo;incentive gap,\u0026rdquo; providing fishers with a combined benefit of 8\u0026ndash;10% of new gear value per kilogram of ALDFG returned. This level closely matches the 10 to 15% participation threshold and is in line with best-practice international findings (Ngoc et al., \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2025\u003c/span\u003e; Gallagher et al., \u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Technical viability and good practices for gear recycling are well documented (Sala \u0026amp; Richardson, \u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2023\u003c/span\u003e; Liotta et al., \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e2024\u003c/span\u003e). Moreover, drawing on the behavioural research of Trinh (\u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2025\u003c/span\u003e), our study confirms that policy salience and targeted outreach are critical: clear and direct communication of the combined benefit can dramatically increase fisher participation\u0026mdash;particularly among liquidity-constrained groups who are most sensitive to marginal income changes\u0026mdash;consistent with salience and bounded rationality insights (Tversky \u0026amp; Kahneman, \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e1974\u003c/span\u003e) and Vietnam-specific behavioural determinants (Pham et al., \u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Compared to past interventions such as buy-back programmes or isolated port-based collection, your integrated approach leverages both the established informal market networks (used by \u0026gt;\u0026thinsp;89% of fishers) and existing national VAT infrastructure. This minimizes administrative burden (\u0026lt;\u0026thinsp;0.5% of incentive value), avoids the creation of new bureaucracy, and supports scale-up without disruptive changes to fisher routines. The scheme also aligns with Vietnam\u0026rsquo;s evolving plastics and circular economy policy landscape (Dang et al., \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Gov. Vietnam, 2019) and broader small-scale fisheries governance considerations (Pomeroy et al., \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2009\u003c/span\u003e). Potential challenges remain; the efficacy of the policy depends upon robust communication, straightforward record-keeping at ports, and stable market demand from recycling buyers. Regional variations in informal market prices should be monitored, and the VAT mechanism must be closely aligned with documentary proof of ALDFG return to prevent gaming or fraud. In addition, end-of-life polymer aging and mechanical recycling cost structures may constrain achievable recycling yields and economics in some streams, which warrants monitoring (Potempa et al., \u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2025\u003c/span\u003e; Van Camp et al., \u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Beyond Vietnam, the core logic of combining modest fiscal incentives with existing cash-market practices is transferable to other Southeast Asian countries and even other plastic-intensive sectors. Legal adaptation\u0026mdash;specifically, amending VAT law to recognize ALDFG and similar resource returns as eligible for exemption\u0026mdash;is a necessary step. The importance of targeted communication and behavioural nudges, as evidenced by the Trinh study and corroborated here, should be central to future policy rollouts.\u003c/p\u003e \u003cp\u003eIn summary:\u003c/p\u003e \u003cp\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eThe combination of a 5% VAT exemption and informal gear resale closes most of the incentive gap deterring large-scale ALDFG returns in Vietnam\u0026rsquo;s small-scale fisheries.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eThe approach aligns policy, market, and behavioural realities, promising recovery rates and cost savings previously unattainable by either instrument alone.\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eLessons from this approach can inform circular economy strategies throughout the plastic value chain in Vietnam and other developing economies, provided incentives are meaningful, visible, and rooted in real-world practices.\u003c/p\u003e \u003c/li\u003e \u003c/ul\u003e \u003c/p\u003e \u003cp\u003eKey recommendations:\u003c/p\u003e \u003cp\u003e \u003col\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eAmend the VAT law to formally include ALDFG returns as VAT-exempt activities (consistent with existing national action plans and legal reviews; Government of the Socialist Republic of Vietnam, 2020; Dang et al., \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2020\u003c/span\u003e).\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eIntegrate VAT documentation protocols with port-based receipt systems for transparency and traceability (Government of the Socialist Republic of Vietnam, 2020).\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eLaunch a national awareness campaign focused on clearly explaining the financial benefits of the scheme to all fishers.\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eConduct regular monitoring to adjust for regional price fluctuations and minimize fraud.\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eExplore further expansion of the scheme to other waste streams (e.g., plastic bags, bottles) where informal collection infrastructure exists. With these actions, Vietnam can move from pilot implementation to national policy leadership\u0026mdash;making its fisheries both greener and economically stronger, and setting a circular economy benchmark for the region.\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003c/ol\u003e \u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003cstrong\u003eCompeting Interests\u003c/strong\u003e\u003cp\u003eFinancial:This research was conducted within the project \u0026ldquo;Prevention, reduction and recy-cling of fishnets polluting Vietnamese coastal waters (REVFIN)\u0026rdquo;, funded by the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) on the basis of a resolution of the German Bundestag.\u003c/p\u003e\u003c/p\u003e\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eCRediT authorship contribution statementT.P.: Conceptualization, Writing \u0026ndash; original draft, Writing \u0026ndash; review \u0026amp; editing, Validation, Funding acquisition. H.Q.P.: Validation, Writing \u0026ndash; review \u0026amp; editing, Methodology. M.E.: Validation, Project administration, Conceptualization.\u003c/p\u003e\u003ch2\u003eAcknowledgement\u003c/h2\u003e\u003cp\u003eThis research was conducted within the project \u0026ldquo;Prevention, reduction and recy-cling of fishnets polluting Vietnamese coastal waters (REVFIN)\u0026rdquo;, funded by the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) on the basis of a resolution of the German Bundestag.We thank the participating fishers and local authorities in Khanh Hoa, Quang Ninh, and Kien Giang.\u003c/p\u003e\u003ch2\u003eData Availability\u003c/h2\u003e\u003cp\u003eThe data that support the findings of this study are provided in the Supplementary Information and are available from the corresponding author upon reasonable re-quest, subject to data-sharing agreements with local partners.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eBovenberg, A. 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Environmental governance through tax law in the European Union. In M. d. G. Garcia \u0026amp; A. Cort\u0026ecirc;s (Eds.), Blue Planet Law (Sustainable Development Goals Series). Springer. \u003cspan class=\"ExternalRef\"\u003e\u003cspan class=\"RefSource\"\u003ehttps://doi.org/10.1007/978-3-031-24888-7_14\u003c/span\u003e\u003cspan address=\"10.1007/978-3-031-24888-7_14\" targettype=\"DOI\" class=\"RefTarget\"\u003e\u003c/span\u003e\u003c/span\u003e\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"ALDFG, value-added tax (VAT) refund, informal recycling markets, behavioural salience, administrative feasibility, Vietnam, fisheries governance","lastPublishedDoi":"10.21203/rs.3.rs-8329512/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8329512/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eAbandoned, lost, or otherwise discarded fishing gear (ALDFG) is a critical source of marine plastic pollution in Vietnam, yet formal recovery participation remains low due to weakly aligned incentives and logistical frictions. We design and evaluate a VAT-linked circular economy instrument that refunds the 5% VAT on new gear for each kilogram of ALDFG returned and verified at ports, while allowing fishers to retain on-site resale proceeds to informal buyers. Drawing on a face-to-face survey of 1,525 fishers across three coastal provinces, behavioural evidence on tax salience, and regulatory analysis of Vietnam\u0026rsquo;s VAT framework, we quantify the combined incentive at 14,500\u0026ndash;16,500 VND/kg (\u0026asymp;\u0026thinsp;8\u0026ndash;10% of new gear price). The scheme integrates port mass verification and receipts with VAT documentation, achieves low estimated administrative cost (\u0026le;\u0026thinsp;0.5% of incentive value), and aligns with informal market practices already used by more than 89% of fishers. Modelling indicates that, under clear communication, participation can rise substantially from current formal return rates, delivering a several-fold increase in verified returns without requiring new bureaucracy. The approach is administratively feasible (requiring a modest legal amendment to extend VAT refund eligibility to ALDFG returns), politically practical, and transferable to comparable fisheries and plastic-intensive sectors. We present an implementation roadmap and governance safeguards (receipt reconciliation, price-variation monitoring, recycling-market stability) to support near-term adoption.\u003c/p\u003e","manuscriptTitle":"Designing a Value-Added Tax-integrated recovery scheme for Abandoned, Lost or Discarded Fishing Gear: Science–policy integration and decision-support for Vietnam’s fisheries","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-12-22 19:08:42","doi":"10.21203/rs.3.rs-8329512/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"72c41524-566d-4110-a1fe-f2287850649e","owner":[],"postedDate":"December 22nd, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2026-04-14T11:57:17+00:00","versionOfRecord":[],"versionCreatedAt":"2025-12-22 19:08:42","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8329512","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8329512","identity":"rs-8329512","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}