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Credit incentives
(e.g. low interest loans or post-investment interest subsidies)
and import duty exemptions for some types of machinery, are all
being applied, even though they are no longer appropriate in the
current context. These incentives are not compatible with the
principle of national treatment, and therefore should be
removed. They are a barrier in our international integration
process, and WTO accession in particular.
In the past, we have tended to limit our incentives scheme only
to new enterprise investment, and have not offered incentives to
expansion or upgrading investments. Thus many enterprises try to
establish an artificial enterprise in the same business field,
so as to be eligible for additional incentives. As a
consequence, social benefits are diminished, due to additional
costs of enterprise registration and administration. However, it
should be recognized that new enterprise investment is good for
employment creation, while investment relating to expansion and
technological upgrading mostly benefits the investors.
Incentives should be targeted at both types of investment.
Mr. Nguyen Van Phung, Deputy Head of Tax Policy Department,
Ministry of Finance
Mr. Nguyen Khac Thanh, Managing Partner, Ernst & Young Vietnam
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