VietNamNet Bridge – Local authorities tend to offer attractive
incentives which go beyond the currently framed preferences, to lure more
foreign investors. However, this may change as experts have called on to
provide incentives selectively and only to targeted investors.
In late 2008, some foreign
investors registered their investment projects to be able to enjoy the
investment incentives stipulated by the laws at this moment. However, the
investors then kept the projects pending for two years, 2009 and 2010. They
only returned in 2011 and asked for the investment incentives the local
authorities promised two years ago.
“Should the investors be given
the promised investment incentives?” questioned Pham Thai Son, Head of the
Board of Management of Industrial Zones in Hung Yen province.
Son’s question shows that Vietnamese
agencies get puzzled with the policies on investment incentives. For a long
time, Vietnam has been applying a policy on providing incentives equally to all
investors. However, Son believes that the policy should be stopped.
“The above said investors should
not be given investment incentives, because they did not follow their
investment commitments, suspending the projects for two years,” Son said.
Economists have repeatedly voiced
their disagreement with the currently applied investment incentive policies.
The Ministry of Planning and Investment, in the draft plan on reviewing the FDI
situation, has admitted that the incentives have been given in a large scale
with too many subjects enjoyable.
Do Nhat Hoang, Head of the Foreign
Investment Agency, has pointed out that with the current fixed tax incentives,
a one billion dollar project would be able to enjoy the same preferences as a
one million dollar project. Hoang believes that this is unfair investment
encouragement policy.
Ngo Sy Bich, Head of the Board of
Management of Industrial Zones in Bac Ninh province, said he was too tired of
moving heaven and earth to ask for the investment incentives for the two big
projects in the province, namely Samsung and Nokia.
Samsung has been cited as a
typical example showing the problems in the current investment encouragement
policy. Despite the huge investment capital and effective operation, under the
current laws, the investor still cannot enjoy incentives for the expanded
project with the investment capital increasing from 670 million dollars to 1.5
billion dollars.
Samsung is now still awaiting the
nod from the government to its proposal to enjoy a specific incentive mechanism
for the project.
Regarding Nokia case, Bich said
it took the board of management three months to get the nod from the government
to allow Nokia to enjoy tax incentives as a high-technology enterprise.
Bich once asked senior officials
of the Ministry of Science and Technology if there has been any project meeting
the requirements to be recognized as high-technology enterprise in accordance
with the High Technology Law, and received the answer “no”.
Bich said he could not imagine
that a law is built so that no enterprise can satisfy its requirements.
The investment incentive policies
were expected to attract foreign investors to high-tech fields and some
important fields. However, Vietnam has failed to obtain that goal with the
policies.
Hoang of MPI believes that it is
necessary not only to set up a standard incentive mechanism, but also apply
flexible incentives for some specific cases. He said that equal incentives
should not be offered to all investors, while incentives should be headed for
targeted investors only.
Thai Ba Canh, Deputy Head of the
Board of Management of Industrial Zones in Da Nang City, also thinks that
Vietnam should accept to conduct negotiations in order to attract huge
projects, provided that it sets up concrete requirements on investors.
Compiled by Thu Uyen
Business & Investment Opportunities
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