The information has been released after more and more foreign investors claimed the investment incentives which go beyond the current incentives frame stipulated by the laws.
Tax incentives did not reach out to the needed areas
Under the current regulations, only several business fields can enjoy the preferential tax rates at the highest level, including 1) high technologies, scientific research and technology development 2) the development of water, electricity plants, bridges, railways, airports, seaports, terminals and some other infrastructure items, and 3) software production.
However, according to the Ministry of Planning and Investment (MPI), the current regulations still cannot cover all the production and business fields which Vietnam wants to attract investment to, such as supporting industries, agriculture and rural development.
Therefore; in the legal documents released recently, competent agencies have offered additional investment incentives, which makes it difficult for both management agencies and investors to apply the new policies.
The MPI’s officials have also pointed out that there have been no concrete regulations and detailed criteria for the projects to enjoy preferences (amount of capital, products, and technologies applied...). This explains why preferences still cannot reach out the projects which really need encouragement.
MPI believes that it is now the right time to reconsider the investment incentive policies and clarify the business fields that Vietnam hopes to attract foreign investments to.
Local authorities in a race for scrambling for investments
Experts have pointed out that there are too many lists of geographical and business fields subject to investment incentives. MPI said that there are seven such lists, and all of them are currently valid.
They said that the Investment Law was compiled by MPI and then submitted by the Government to the National Assembly for approval. However, while implementing the law, ministries and branches independently compile decrees and legal documents to stipulate the issues relating to their management fields. Therefore, there exist a lot of legal documents on the same issues and the overlapping in the management.
The tax incentives applied to the projects in industrial zones, export processing zones, economic zones and hi-tech zones, have been cited as a typical example.
The Decree 108 released in 2006, and the Decree 29 released in 2008, stipulate that the above said industrial zones can enjoy the investment incentives designed for the areas with difficult socio-economic conditions.
However, according to the currently applied corporate income tax, the enterprises in the industrial zones cannot enjoy the corporate income tax incentives like the ones operating in difficult socio-economic conditions.
Similarly, the enterprises in industrial zones also cannot enjoy the preferential import tariff as the enterprises in difficult socio-economic areas, because the Decree 87 promulgated in 2010 does not allow applying the preferences.
In the latest news, the Ministry of Finance has agreed to the proposal by MPI, saying that the list of the geographical areas and business fields subject to investment incentives, and the concrete preferences would be drawn up by the two ministries for submitting to the government for approval.
Source: TBKTVN
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.
No comments:
Post a Comment