Lawmakers discuss tax incentive for special administrative zones

The National Assembly’s Standing Committee discussed the draft Law on Special Administrative Economic Units on April 16 with a focus on preferential policies to attract investment.

The National Assembly’s Standing Committee discussed the draft Law on Special Administrative Economic Units on April 16 with a focus on preferential policies to attract investment

The units include Van Don in the northern province of Quang Ninh, Bac Van Phong in the coastal central province of Khanh Hoa and Phu Quoc in the southern province of Kien Giang.

Chairman of the NA Law Committee Nguyen Khac Dinh said tax incentive policies for these zones, as regulated in the draft law, strictly followed the Politburo’s direction to ensure they can compete with other zones in the world and draw investment.

Most of tax incentives drafted in the law were applied during a limited period, and applied for investment projects of sectors that are prioritised for development and needed to draw investment in the initial period when the special zones are built, he said.

The three special zones defined building and supplying tourism and entertainment services, including casinos, as one of the projects prioritised for development and investment attraction, according to Dinh.

Dinh said it was a multi-functional complex project that required huge investment capital, at a minimum of VND44 trillion (US$1.97 billion), so it needed preferential policies relating to tax and land lease fees to draw investment and ensure international competition.

However, he added that the project would bring in high economic profits and be attractive to investors so it needed careful study and consideration about preferential policies in order to not cause loss to the State budget in the long-term period.

NA Chairwoman Nguyen Thi Kim Ngan said the compiling board should carefully study the policies to ensure equality for both foreign and domestic investors to create an equal environment for all businesses to join.

NA Vice Chairman Phung Quoc Hien stressed that the main target of the establishment of the three special zones was to create economic driving force and promote the competitive advantages of each zone so the efficiency must be put on the top.

“How will these zones bring in profits for the country? How will the results be in the long-term period?” he said, adding the compiling board needed to study specific resources in order to ensure the feasibility.

He also highlighted the need to carefully calculate and make sure there are reasonable preferential policies, including tax reduction and exemption, to avoid creating burden for the State budget.

Some deputies also said it was necessary to make clear “special” criteria for these zones.

The governments of these three zones, according to the draft, will be established differently than other local governments, consisting of people’s committees and people’s councils.

Regarding land lease, Dinh said the regulation on the draft law was amended, in which chairmen of the people’s committees of the special zones can grant land lease for production and business up to a maximum of 70 years. In special cases, the land lease could last up to 90 years but must be decided by the Prime Minister. 

Later the same day, deputies discussed the projected law and ordinance building programme in 2019.

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