VietNamNet Bridge - According to Viettel’s document to Prime Minister Nguyen Tan Dung, Samsung Vietnam enjoys a lot of tax incentives while domestic firms that face big difficulties are not provided with these preferentials.

In its dispatch to the Prime Minister and the Ministry of Finance to present its difficulties and problems in the production of mobile phones, the Military Telecom Group (Viettel) said that they are disadvantaged in preferentials compared with Samsung Electronics Vietnam (SEV), an enterprise with 100 percent foreign capital.

According to Viettel, foreign cell-phone manufacturers in Vietnam are exempted from taxes on raw materials, supplies, and accessories. Typically, SEV enjoys import tax exemption for 5 years for materials, supplies, components and auxiliary parts for manufacturing, assembling of mobile phones.

In September 2012, SEV was transferred into the form of export processing enterprise with the highest level of incentives for investors in Vietnam in terms of corporate income tax and a lot of incentives on import tax and value-added tax ...

According to Viettel, compared with foreign-invested businesses, domestic enterprises have not received much support, while they have to confront with many challenges. “The domestic producers like Viettel need the timely support of the government and the ministries and agencies to develop the field of mobile phone manufacturing," the dispatch wrote.

Viettel also said that the import tax rates on materials, supplies, components and auxiliary components to produce mobile phones in Vietnam are still high, while most are imported. Many key components that Vietnam is ineligible to manufacture are still imposed with high import tax rates, ranging from 15 to 25 percent. The high tariffs make the production costs of domestic enterprises higher than the imported products of the same kinds.

At present, the import duty on mobile phone is zero percent, while that on components for cell phone production is up to 25 percent.

Viettel asked the Prime Minister and the Ministry of Finance to consider import duty exemption for all materials, supplies and auxiliary parts for research, design, manufacturing and assembling of mobile phones for Viettel and its subsidiaries. Tax exemption period is five years, from 2013 until 2017.

Viettel also asked for corporate income tax rate at 10 percent for income from the sale of its mobile phones.

S. Tung