No special treatment for support industries: Finance Ministry

The Ministry of Finance (MoF) and the Ministry of Industry and Trade (MoIT) have failed to find common ground with regards to tax policies for Vietnam’s support industry enterprises.

No special treatment for support industries: Finance Ministry
An assembly line at Truong Hai Auto Corporation THACO. VNA Photo

In the latest response to a recent document circulated by the MoIT on solutions to aid the growth of the support industry, the MoF suggested the MoIT remove several key points on possible changes made to the Law on Value-added Tax, Law of Special Consumption and Law on Personal Income.

The document, reportedly introduced by the MoIT, aims to simplify the country’s tax code and push for wider administrative reforms for the manufacturing sector and support industries.

While it did not oppose the changes, the MoF said policy changes must go through the proper channels and be subject to rigid scrutiny before they could be implemented. This is the third time it has made such comments on the matter since the formation of the document.

The MoF cited recent directives approved by the Politburo and the National Assembly to separate social assistance and tax duties, a move aimed at maintaining tax neutrality. It also claimed to have prepared guidelines and solutions in line with the directives and therefore advised the MoIT to stay clear of specifics on such matters.

For example, import duties for car engines and gearboxes in 2019 under the ASEAN Trade in Goods Agreement (ATIGA) and ASEAN-Korea Free Trade Agreement (AKFTA) were set at the same or lower than the most favoured nations (MFN) level for 2018.

 

According to the MoF, bringing the level of tariffs down to ATIGA level at 0 per cent for said commodities would speed up the implementation of both the AKFTA and the Vietnam-Korea Free Trade Agreement (VKFTA), and potentially disrupt trade as businesses diverted activities to countries with preferential tariff rates.

In 2019, car engines and gearboxes from S Korea accounted for 33.7 per cent of total imports, with China in second place at 20 per cent, followed by ASEAN and Japan at 18 per cent. Should businesses want to take advantage of reduced import tariffs, they could opt to import from ASEAN and Japan. Speeding up the AKFTA and VKFTA would further skew the trade balance in favour of importing more from S Korea, resulting in increased dependency on a single source, less diversified supply and reduced tax income.  

In addition, automotive assembly, under the effect of Government Directive 111/2015/NĐ-CP to aid support industries, was already enjoying several preferential policies including zero import tariffs on parts that could not be sourced domestically for up to five years, which in the MoF’s view was adequate as a support measure.

The MoF also said it did not favour the study of a special credit scheme or prioritised ODA funding for support industries, claiming they should be treated just like other industries by going through the common borrowing protocol.  VNS

State needs to activate support package for businesses

State needs to activate support package for businesses

Local enterprises have urged the Government to soon activate support policies to help them overcome difficulties in production and business due to the novel coronavirus (COVID-19) pandemic.

Automobile industry stimulus policies proposed

Automobile industry stimulus policies proposed

The luxury tax rate on electric automobiles and the added value created in Vietnam in automobile manufacturing and assembling may be cut to zero percent to encourage the development of supporting industries.

 
 

Other News

.
Vietnam needs US$8-10 billion for electricity investment annually
Vietnam needs US$8-10 billion for electricity investment annually
BUSINESSicon  08/09/2020 

Given the increasing demand for electricity, Vietnam needs US$8-10 billion for electricity investment annually, Minister of Industry and Trade Tran Tuan Anh said at a meeting on Monday, September 7.

Thu Duc City set to be new growth pole for HCM City
Thu Duc City set to be new growth pole for HCM City
BUSINESSicon  09/09/2020 

Like Gangnam south of the Han River in Seoul and Pudong east of the Huangpu River in Shanghai, Thu Duc City is expected to become a new growth area for HCM City.

Nam Dinh-based Rang Dong Textile Industrial Park sign land lease contracts with foreign firms
Nam Dinh-based Rang Dong Textile Industrial Park sign land lease contracts with foreign firms
BUSINESSicon  08/09/2020 

The signing ceremony of a land lease contract and land delivery for factory construction between Cat Tuong Real Estate Group, Top Textile Co., Ltd and Jehong Textile Viet Nam Co, Ltd took place on September 4.

Ministry proposes overhaul of investment framework for power projects
Ministry proposes overhaul of investment framework for power projects
BUSINESSicon  08/09/2020 

The National Assembly's economic committee held a hearing on the development of Vietnam's energy sector until 2030 yesterday.

Mooncake producers begin selling well before Mid-Autumn Festival
Mooncake producers begin selling well before Mid-Autumn Festival
BUSINESSicon  08/09/2020 

The Mid-Autumn Festival is a time for mooncakes, a baked pastry that symbolises family reunions and which is traditionally consumed as part of the...

Vietnam to face power shortages
Vietnam to face power shortages
BUSINESSicon  08/09/2020 

Vietnam would face the risk of power shortages from 2021-25 due to slow progress at many large power projects both in the northern and southern...

Biggest business stories: August 31 to Sep 6
Biggest business stories: August 31 to Sep 6
BUSINESSicon  08/09/2020 

Big changes were made with the key personnel of Quoc Cuong Gia Lai Group, while the president of Hoang Anh Gia Lai Group, Doan Nguyen Duc, has not been able to escape difficulties despite his efforts to sell assets to pay debts.

Multi-trillion VND helps VN-Index regain peak
Multi-trillion VND helps VN-Index regain peak
BUSINESSicon  07/09/2020 

The strong cash flow to the stock market in recent days has helped stock prices bounce back.

Online shopping sees record growth, ranked 3rd in region
Online shopping sees record growth, ranked 3rd in region
BUSINESSicon  08/09/2020 

The total number of visits to online shopping apps in Vietnam reached 12.7 billion in the first six months of the year, the highest ever figure.

Vietnamese rice takes bite out of global market
Vietnamese rice takes bite out of global market
BUSINESSicon  07/09/2020 

Vietnam’s rice exports have expanded during the pandemic to surpass rival Thailand in price for the first time in three decades, leading experts to suggest the sector should consolidate its position.

Plastics industry shrugs off pandemic, interests stock investors
Plastics industry shrugs off pandemic, interests stock investors
BUSINESSicon  07/09/2020 

The new wave of Covid-19 infections has caused heavy pressure on the country’s economy. 

EU competition in redrawn public procurement landscape
EU competition in redrawn public procurement landscape
BUSINESSicon  07/09/2020 

Competition in Vietnam’s government procurement market is expected to heat up with the involvement of EU contractors, driven by the country’s highest-ever market-opening commitment in this field. 

Alibaba.com rolls out export-focused program for Vietnamese SMEs
Alibaba.com rolls out export-focused program for Vietnamese SMEs
BUSINESSicon  07/09/2020 

Alibaba.com, the global business-to-business (B2B) e-commerce platform of Alibaba Group, has launched a landmark initiative to help businesses in Vietnam go online and reach an enormous pool of qualified global buyers.

Profit taking to weigh on local market, but September may be bright
Profit taking to weigh on local market, but September may be bright
BUSINESSicon  07/09/2020 

Vietnam’s stock market rally may slow this week as investors eye profits but the one-month projection is still optimistic.

E-commerce gives impetus to woodworking sector
E-commerce gives impetus to woodworking sector
BUSINESSicon  06/09/2020 

In the rapid development of e-commerce, online stores and factories are one of the solutions with which enterprises can cope with the prolonged Covid-19 pandemic while laying a foundation for digitalized business

Key public investment projects gather speed
Key public investment projects gather speed
BUSINESSicon  07/09/2020 

Amid the government’s rush to push up public investment as one of the key pillars for economic growth, numerous projects have been accelerating their progress to match the plan set forth, 

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 8
VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 8
BUSINESSicon  08/09/2020 

Solar power developers acquire massive profit in short time

ASEAN aiming for tech-led innovation to foster growth
ASEAN aiming for tech-led innovation to foster growth
BUSINESSicon  07/09/2020 

ASEAN countries are becoming a rising hub destination for global manufacturers thanks to well-established trade networks, a growing middle class, a thirst for tech expansion, and a young and educated workforce.

Logistics groups strive to exploit EVFTA potential
Logistics groups strive to exploit EVFTA potential
BUSINESSicon  07/09/2020 

The EU-Vietnam Free Trade Agreement has created a new driving force for Vietnam’s logistics, but the industry needs to take further action to unlock its full potential.

The path to economic recovery and further growth
The path to economic recovery and further growth
BUSINESSicon  06/09/2020 

While Vietnam has experienced an unprecedented boom in recent decades, the current pandemic is now having a clear negative impact on the economic outlook. 

 
 
 
Leave your comment on an article

OR QUICK LOGIN