VietNamNet Bridge – State owned economic groups, considered the
motive force of the national economy, have also complained about difficulties,
while repeatedly begging for the preferences from the State.
Conglomerates will live only with the State’s support
In the latest document sent to
the Ministry of Finance (MOF), the national oil and gas group PetroVietnam
asked for the permission to exempt the personal income tax (PIT) for the
group’s officers who go abroad on business. If MOF does not accept the
proposal, PetroVietnam wishes to come forward to pay the tax for the officers.
However, the expenses would be counted as “reasonable expenses” when
calculating corporate taxable income.
After advancing the sum of 2.9
trillion dong to localities and ministries to implement cooperation plans,
PetroVietnam has asked the government to help local authorities pay debts back
to it.
The information has angered the
public. People say they cannot understand why such a powerful group like
PetroVietnam, whose workers have the highest average income level in comparison
with other economic groups (17 million dong a month), also needs support and
insists on preferences.
The story of PetroVietnam has
reminded people of the case of the Electricity of Vietnam (EVN). The power
group in 2007 asked for the permission from the Ministry of Finance to use a
huge sum of money to award to its workers. Meanwhile, the power group kept
complaining about loss. It said it lacked tens of trillions of dong to develop
power generation plants, insisting on raising the retail electricity prices.
The EVN’s situation was reportedly
so serious that it had to “give back” the 13 thermopower plants to the
government, because it could not arrange sufficient capital to implement the
projects.
Of course, the proposal by EVN
was not approved. The government then requested EVN to strictly follow the
current laws on the corporate income tax duties and reduce the bonuses for its
workers.
The Vietnam Coal and Mineral
Industries Group (Vinacomin), another energy group, backed by the Vietnam
Energy Association, has also asked for the favor.
In late October, the association,
after citing the big difficulties incurred by “the three pillars of the
national economy” Vinacomin, EVN and PetroVietnam, sent a letter to the
government, saying that the energy sectors needs the government help in some
fields.
VEA has said that though the coal
export tariff has been reduced to 10 percent, the tariff is still higher than
that in other regional countries, which has made the difficulties Vinacomin is
facing more serious.
The Ministry of Industry and
Trade some months ago submitted to the Prime Minister the suggested plan to
rescue businesses. However, the noteworthy thing is that the measures suggested
by the ministry mostly relate to the economic groups and enterprises in the
industries put under the management of the ministry.
Especially, the ministry has
asked for the granting of some preferential mechanisms to its conglomerates
including the steel corporation, chemicals and paper corporations, EVN,
Vinacomin.
Out-of-date way of thinking
Pham Chi Lan, a well-known
economist, told VietNamNet that the proposals made by the economic groups show
that the state owned groups still expect the subsidy from the State.
“Instead of shouldering some
difficulties with the State, the state owned conglomerates are going on the
opposite way,” Lan said.
Meanwhile, Lan said, the state
budget is limited, especially in 2012, when a lot of enterprises have to get
dissolved and unprofitable businesses do not pay corporate income tax.
The situation has become so
serious that the Ministry of Finance has sought the National Assembly’s nod on
the delay in implementing the wage increase plan.
Pham Huyen
Business & Investment Opportunities
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